Bond Auctions - How can Ireland repay exisiting bonds?

Tony Liar

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FF have said they are not going back to the bond markets until next year. There is 800 million to be repaid on the 8th of December, and a very nice bond of €2 billion to be repaid on 14th January 2011.

So, that is almost another €3 billion that has to be found from somewhere before mid January. Over February ,March and April another €4 billion needs to be found to repay some of those short term bonds.

Can this money be found without EU/IMF help? I doubt it.

Well done to Lenihan on giving us the "cheapest bailout in the world".
 


gijoe

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They have cash in hand of over €10billion I think.
 

He3

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On Morning Ireland Lenihan said the NTMA had decided it could not proceed with planned auctions in October and November.

Game over.
 

Thac0man

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Can this money be found without EU/IMF help? I doubt it.
I believe that EU governments as a block already have about 30% of our recent bond issue. Thats Europes safety value on us I think. It will cost them, but if the exchanged their later maturing bonds, which have a higher yield, for part of the soon to be due bonds which have a lower rate, it could stave off collapse. Its not that we can't borrow €1.8 Billion (At nearly 7% apr), I think its that that amount could trigger a steeper decline and make our inevitable default closer.
 

He3

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Having looted the treasury and borrowed till the lenders will lend no more, it is time for FF to execute its own bailout plan - grinning as they hand over office to FG/Lab.
 

gijoe

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On Morning Ireland Lenihan said the NTMA had decided it could not proceed with planned auctions in October and November.

Game over.
That's my feeling as well. I think we will be in the grasp of the IMF/EU Statbility Fund before the next auction in January. Canceling the bond auctions was an admission of defeat.
 

Paddythai

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So, does this mean that Irish bonds are still traded or do investors loose interest for a while.
I notice they are still valued at about6.6%
 

Dreaded_Estate

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We have no major bonds maturing this year.

We have coupon payments of about €1bn in 2010 and €5.6bn maturing by April 2011.

So €6.6bn to repaid by April 2011
 
D

Dylan2010

its easy, close down pointless services like heathcare in the future to make the interest payments. We collectively seem to be have signed up to Ocean Finance ;-)
 

orbit

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We have no major bonds maturing this year.

We have coupon payments of about €1bn in 2010 and €5.6bn maturing by April 2011.

So €6.6bn to repaid by April 2011
Yes, April 2011 will be the crunch date. If the bond markets don't settle down by then, that could be when we go cap in hand to the EU. I noticed Lenihan wasn't ruling it out this morning on the radio.
 

nuj

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I believe that EU governments as a block already have about 30% of our recent bond issue. QUOTE]

What basis have you for believing that? Source?
 

wellfkmepink

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April 2011 is along way out, it gives a great chance to the bond yields to come back to some sort of reasonable rate.

You can say what you want about Lenihan but there is no doubt but that the NTMA know what they are doing.

Case and point being our average rate is around 4% and every issue is being well subscribed.
Irish bond issuing or management will not bring the country down.
 

nuj

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So, does this mean that Irish bonds are still traded or do investors loose interest for a while.
I notice they are still valued at about6.6%
10 year bond is bid around 6.60%, market's open, and yields have fallen on the morning by about 10bp.
 
D

Dylan2010

April 2011 is along way out, it gives a great chance to the bond yields to come back to some sort of reasonable rate.

You can say what you want about Lenihan but there is no doubt but that the NTMA know what they are doing.

Case and point being our average rate is around 4% and every issue is being well subscribed.
Irish bond issuing or management will not bring the country down.
you must be a glass half full type of person. The NTMA are no better then any hedge fund out there, what happens if the stock market crashes again , or some other country hits a brick wall first? the "irish gamble" is priced to perfection in that if there are no banana skins around the world it might work out otherwise the decision backfire, its that simple.
 

olamp

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On Morning Ireland Lenihan said the NTMA had decided it could not proceed with planned auctions in October and November.

Game over.
Didn`t Paul Somerville from Delta Index say last night that if the bond auctions did not go ahead there would be a a flight of assets from this country?.He intimated thet it would be GAME OVER.
 

nuj

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Didn`t Paul Somerville from Delta Index say last night that if the bond auctions did not go ahead there would be a a flight of assets from this country?.He intimated thet it would be GAME OVER.
Paul who?
 

libertarian-right

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what happens if the stock market crashes again , or some other country hits a brick wall first?
We are too unstable at the moment to cope with more external pressure, we'd be the first ones to fall in that scenario.

The only option left for the government is to bring in a heavy hitting budget. They think 4 billion is enough to convince the markets, I somehow doubt it as expenditure will still stick out like a sore thumb in our exchequer figures. Remember even with the income levys being introduced and doubled, yet it did not halt the decline in income tax, blood from a stone. I expect corporation tax will be the bargaining chip with the EU/IMF, leading to dreadful medium/long term prospects in terms of FDI. Majority of the job creation the last while has only come from foreign companies setting up shop in Ireland.

We haven't even gone through the complex nature of reducing the deficit without having a complete fallout due to mortgages arrears which leads to another crisis. A pensions crisis is also down the road.
 

libertarian-right

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Paul who?
Management Team

Mr Sommerville has over 18 years experience in the financial services industry and joins Delta Index from City Index Advisory where he was a senior trading advisor on spread betting and contracts for difference for 6 yrs. Prior to this, Paul was Head of Interest Rate Futures at Tullettand Tokyo Japan for 5yrs. Paul has a BA Degree in Pure Economics from University College Dublin
 


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