This May, the National Treasury Management Agency launched a bond exchange programme to rationalize the country's outstanding issues which, with a wide variety of maturities and values, were largely illiquid. New issues were launched across the curve, offering conversion terms for investors to return the old bonds in equivalent economic value for the new bonds.
The programme was well received by traders in Dublin, who said it was innovative, well supported by investors and that some 95% of the programme was taken up.
NTMA director for risk, Paul Sullivan, says: "There's a gradual process of diversification going on within the institutional savings market in Europe and, as a sovereign debt manager and issuer, we have to ensure that our bonds are competitive in that environment. And that means not just in terms of price but also in terms of liquidity and clearing arrangements."
He says that sharp falls in Irish government bond yields had meant that the bonds were trading well above par, and that was a deterrent to new investors, for tax and other considerations.
"The need to maintain liquidity was central to the NTMA's bond management strategy," says Sullivan.