DUBLIN (Reuters) - Ireland is very close to the normalised market funding that would make it eligible for the European Central Bank’s bond-buying programme after the country’s bond sale this week, its debt chief said on Wednesday.
Ireland kicked off its funding for the year on Tuesday when it sold 2.5 billion euros (2 billion pounds) of 2017 paper, raising a quarter of the 10 billion euros it aims to borrow in 2013 before a planned exit from its EU/IMF bailout.
The National Treasury Management Agency (NTMA) hopes to resume monthly auctions at some point this year and said this could be enough for it to qualify for the ECB’s Outright Monetary Transactions (OMT) scheme.
“One of the conditions for OMT is that you have to have normalised your engagement with the markets. Yesterday’s transaction is as close to normalisation, maybe the monthly auctions would be the icing on the cake,” NTMA chief John Corrigan told a news conference.
“I would make the case (of normalisation) but I‘m not sure that the ECB would accept that case, but it’s very close to it.”
Under the plan, countries already in a bailout programme can benefit from unlimited ECB purchases when they demonstrate full market access, although Corrigan noted that the ECB had not provided a definition on what constitutes such access.
Adding to the confusion over when Dublin would qualify, the country’s finance minister said Ireland would likely will be judged to have regained the market access needed when it places a new benchmark bond on two occasions.
“The ECB would probably say a significant issuance of 9-year paper - maybe twice - and then they would call that full access,” Michael Noonan told a news conference.
Ireland and its bailout lenders are also examining what additional support measures could be put in place to smooth its exit from the November 2010 bailout, which totalled 85 billion euro.
Corrigan said Dublin’s lenders were also examining what sort of conditional credit lines they would be prepared to offer when Ireland’s bailout ends, a backup he said that would give the market comfort and influence the timing of his agency’s bond operations.
As well as the monthly bond auctions, Corrigan said his team would discuss a 10-year benchmark issue with investors and that the option of a U.S. syndicated issue was still on the table as American investors remained “very bullish” on Ireland.
The NTMA also announced that its first treasury bill auction of the year would take place on January 17 and Corrigan, who described Moody’s junk rating of Ireland as “depressingly low”, said the T-bill sales would remain capped at 500 million euros.
Additional reporting by Conor Humphries; Editing by Stephen Nisbet and Toby Chopra