Seems there’s a bit of scramble to take up Ireland’s first bond offering since exiting the bailout and after announcing a 10 year bond sale yesterday the banks have been caught on the hop offering a guidance price.
A fair few banks were setting a guide price of +150 bps over the mid-swaps price but after being hit with a big amount of interest they’ve revised the price down to +140 bps. It’s estimated that there has been over €9bn €14bn (gone up as I write) shown in interest for what is expected to be around a €3bn issue.
Bidding closed at 9.30 am this morning and the details of pricing will be issued later today. The yield is expected to be just over 3.5%.
Once again it shows that the euro is likely to receive good support from issues like this over the year. It’s a no brainer really. Whatever you think about the real macro and micro economic situation in Europe there is good value in long term bonds at around 4%. With inflation falling also the returns are not being eroded so much either. With the ECB ready to do whatever it takes to support the EZ investors see that risk is diminishing, and that’s all they really want to know before putting their money up.
