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 Post subject: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 11:20 am 
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Although Dublin’s treasurers had intended to cap the size of the deal at about €3bn-€3.5bn, an overflowing order book north of €13bn for Ireland’s 10 year bond sale has allowed bankers to tighten the pricing of the deal.

Bankers on the deal had already tightened the pricing of the deal, from the initial guidance of 150 basis points above midswaps, a pricing benchmark, to about 142-143 bp – or possibly lower. The order book will be closed and the bond formally priced by lunchtime in the UK.



Strong demand for Ireland’s post bailout bond issue - FT.com http://on.ft.com/1knIMJy via @FT


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 11:56 am 
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slasher wrote:
Quote:

Although Dublin’s treasurers had intended to cap the size of the deal at about €3bn-€3.5bn, an overflowing order book north of €13bn for Ireland’s 10 year bond sale has allowed bankers to tighten the pricing of the deal.

Bankers on the deal had already tightened the pricing of the deal, from the initial guidance of 150 basis points above midswaps, a pricing benchmark, to about 142-143 bp – or possibly lower. The order book will be closed and the bond formally priced by lunchtime in the UK.



Strong demand for Ireland’s post bailout bond issue - FT.com http://on.ft.com/1knIMJy via @FT


http://www.rte.ie/news/business/2014/01 ... bond-sale/

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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 1:29 pm 
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Any idea who's buying these? Is there anyone outside of euro zone banks?

If I employed an investment manager and he gave Ireland 10 year cash at 3.5% he'd be looking for a new job.

Can't find Observer's post from the other day showing the other countries whose debt you could buy for a similar yield without the same hideous debt to GDP ratio

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Borrowers seeking mortgages have had to resort to saving deposits, forcing many to sit by and watch house prices tumble without being able to do anything about it. Sunday Independent - June 1 2008

I know a lot of them, like [Jimmy] Flynn, [Noel] O’Flaherty and the Baileys. You meet the Baileys at Croke Park every time you go there. You can’t avoid getting a slap on the back going in from them. Most of these guys lost their shirt. I feel sorry for them - Bertie Ahern


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 1:41 pm 
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Does this indicate Bailout 2 is less likely to happen? Raising 3.75bn with orders for 14bn seems like a strong result for the NTMA.


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 1:52 pm 
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Renting And Proud! wrote:
Any idea who's buying these? Is there anyone outside of euro zone banks?

If I employed an investment manager and he gave Ireland 10 year cash at 3.5% he'd be looking for a new job.

Can't find Observer's post from the other day showing the other countries whose debt you could buy for a similar yield without the same hideous debt to GDP ratio


Just updated the post - it is institutions buying on behalf of Irish banks (who cannot just the 0% ECB money in primary issuance)
http://www.thepropertypin.com/viewtopic.php?p=752802#p752802


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 1:52 pm 
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inregionof wrote:
Does this indicate Bailout 2 is less likely to happen? Raising 3.75bn with orders for 14bn seems like a strong result for the NTMA.


Certainly. Doom merchants on here may not like it, but the markets have confidence that our debt is sustainable. And it's not all Draghi money buying the bonds either.


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 2:16 pm 
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finalised 140 basis points above midswaps

Mark Murnane ‏@markmurnane 42m
Irish 10 year at 140 over 10y swaps 2.12 so comes in at 3.52%.

http://www.bloomberg.com/news/2014-01-0 ... eport.html


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 2:57 pm 
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I certainly feel our debts are unsustainable

mortgageboy wrote:
Certainly. Doom merchants on here may not like it, but the markets have confidence that our debt is sustainable. And it's not all Draghi money buying the bonds either.


observer35 wrote:
it is institutions buying on behalf of Irish banks (who cannot just the 0% ECB money in primary issuance)


Have either of you sources for the yes and no answers above

I stand by my comment (which is my own opinion), anyone handing the Irish government 10 year cash at 3.5% is bonkers

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Borrowers seeking mortgages have had to resort to saving deposits, forcing many to sit by and watch house prices tumble without being able to do anything about it. Sunday Independent - June 1 2008

I know a lot of them, like [Jimmy] Flynn, [Noel] O’Flaherty and the Baileys. You meet the Baileys at Croke Park every time you go there. You can’t avoid getting a slap on the back going in from them. Most of these guys lost their shirt. I feel sorry for them - Bertie Ahern


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:16 pm 
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mortgageboy wrote:
inregionof wrote:
Does this indicate Bailout 2 is less likely to happen? Raising 3.75bn with orders for 14bn seems like a strong result for the NTMA.


Certainly. Doom merchants on here may not like it, but the markets have confidence that our debt is sustainable. And it's not all Draghi money buying the bonds either.


I am sure that all the financial whizz kids will be right this time. Remember its not their money and they will have pocketed their commission.

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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:39 pm 
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Renting And Proud! wrote:

[quote
I stand by my comment (which is my own opinion), anyone handing the Irish government 10 year cash at 3.5% is bonkers


The bond buyers aren't giving the Govt money for 10 years - they can sell the bonds tomorrow if they like. The bonds might be traded thousands of times before maturity.


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:41 pm 
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mortgageboy wrote:
Renting And Proud! wrote:

[quote
I stand by my comment (which is my own opinion), anyone handing the Irish government 10 year cash at 3.5% is bonkers


The bond buyers aren't giving the Govt money for 10 years - they can sell the bonds tomorrow if they like. The bonds might be traded thousands of times before maturity.



Buying them at 3.5% might not be the best starting point but you only need to find a bigger mug

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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:44 pm 
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Renting And Proud! wrote:
I certainly feel our debts are unsustainable

mortgageboy wrote:
Certainly. Doom merchants on here may not like it, but the markets have confidence that our debt is sustainable. And it's not all Draghi money buying the bonds either.


observer35 wrote:
it is institutions buying on behalf of Irish banks (who cannot just the 0% ECB money in primary issuance)


Have either of you sources for the yes and no answers above

Here's a simplified debt projection profile from the NTMA. The Govt has exceeded its targets to date. Employment and the economy are growing, so I think it's more likely than not that these projections will be accurate (or exceeded). Plenty of independent commentary concurs.

Debt Projections
Projected General Government Debt / GDP Ratio 2012-2016

Year % GDP € €bn
2012 117.4 192.5
2013 (e) 124.1 205.9
2014 (f) 120.0 204.7
2015 (f) 118.4 209.4
2016 (f) 114.6 211.6


Last edited by mortgageboy on Tue Jan 07, 2014 3:46 pm, edited 2 times in total.

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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:45 pm 
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mortgageboy wrote:
The bond buyers aren't giving the Govt money for 10 years - they can sell the bonds tomorrow if they like. The bonds might be traded thousands of times before maturity.


I understand that but the yield it is trading at should reflect forward looking risk (liquidity, inflation, default etc) until the bond matures (i.e. the bond may trade any number of times but, unless there is a default, it will be redeemed eventually).

IMO the reward does not compensate one for the risk

_________________
Borrowers seeking mortgages have had to resort to saving deposits, forcing many to sit by and watch house prices tumble without being able to do anything about it. Sunday Independent - June 1 2008

I know a lot of them, like [Jimmy] Flynn, [Noel] O’Flaherty and the Baileys. You meet the Baileys at Croke Park every time you go there. You can’t avoid getting a slap on the back going in from them. Most of these guys lost their shirt. I feel sorry for them - Bertie Ahern


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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:46 pm 
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Posts: 2211
mortgageboy wrote:
Renting And Proud! wrote:
I certainly feel our debts are unsustainable

mortgageboy wrote:
Certainly. Doom merchants on here may not like it, but the markets have confidence that our debt is sustainable. And it's not all Draghi money buying the bonds either.


observer35 wrote:
it is institutions buying on behalf of Irish banks (who cannot just the 0% ECB money in primary issuance)


Have either of you sources for the yes and no answers above

Here's a simplified debt projection profile from the NTMA. The Govt has exceeded its targets to date. Employment and the economy are growing, so I think it's more likely than not that these projections will be accurate (or exceeded). Plenty of independent commentary concurs.

Debt Projections
Projected General Government Debt / GDP Ratio 2012-2016

Year % GDP € €bn
2012 117.4 192.5
2013 (e) 124.1 205.9
2014 (f) 120.0 204.7
2015 (f) 118.4 209.4
2016 (f) 114.6 211.6


If they could predict the future these guys would be buying bonds not selling them

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 Post subject: Re: Strong demand for Ireland’s post bailout bond issue
PostPosted: Tue Jan 07, 2014 3:48 pm 
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Posts: 688
Renting And Proud! wrote:
mortgageboy wrote:
The bond buyers aren't giving the Govt money for 10 years - they can sell the bonds tomorrow if they like. The bonds might be traded thousands of times before maturity.


I understand that but the yield it is trading at should reflect forward looking risk (liquidity, inflation, default etc) until the bond matures (i.e. the bond may trade any number of times but, unless there is a default, it will be redeemed eventually).

IMO the reward does not compensate one for the risk


Well the buyers are obviously discounting default risk, so it's just inflation versus returns elsewhere.


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