Fortress Financial Puts Faith in the Irish Economy

Managing Director Hamed Mokhtar Discusses Why Ireland's Recent Bond Sale Marks the Road to Recovery

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This economic performance has regained the confidence of international investors and is ahead of schedule in reaching its economic targets for the year.

Dubai (PRWEB) February 14, 2013

Two years after securing an €85 Billion bailout from the EU and IMF, the Irish economy showed signs of recovery with a €2.5 Billion bond sale. “According to the country’s National Treasury Management Agency (NMTA), the offer attracted almost €7 Billion worth of orders, allowing the debt office to raise €2.5 Billion, with a yield of 3.35%. With the Irish government aiming to borrow €10 Billion ahead of a planned exit from its EU/IMF bailout in 2013, its success in securing 25% of this amount in the first two weeks of the year indicated a healthy international appetite for its government debt and renewed faith in the island economy. “ Says Hamed Mokhtar, Managing Director of Fortress Financial.

Demand for the debt was stronger than expected, with the Irish government initially expecting to net only €2 Billion at a yield of 3.45%. 13% of the bonds were purchased by domestic investors, with 87% being snapped up by international investors, according to the NMTA. The overseas investors were mainly from the UK (35.6%), Nordic countries (12.4%), France (9.5%), and Germany (7.2%). “The bond raise was a significant development for the Irish economy, as the country was only first able to raise capital for the first time since the November 2010 bailout through a bond exchange last summer.” Says Hamed Mokhtar.

The yield of the 2017 bond dipped 4 basis points to 3.22 %, down from the 5.72 % yield when the issue started trading last July, according to Bloomberg data. Finance Minister Michael Noonan said the success of the bond issue represented international recognition of Ireland's progress but that it reinforced the case for helping the state to reduce the burden of bank debt assumed as part of the 2010 bailout deal. He hopes that Ireland will return to regular monthly bond auctions sometime this year.

Ireland’s 0.2 per cent quarterly expansion was only bested by Germany among the big European economies in the third quarter last year – showing that the country’s economic performance not only outpaced all other economies of the Eurozone’s periphery, but many of its core economies as well. “This economic performance has regained the confidence of international investors and is ahead of schedule in reaching its economic targets for the year.” Says Hamed Mokhtar of Fortress Financial.


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