(Adds detail on demand, revised price guidance)
DUBLIN, April 15 (Reuters) – Ireland received more than 23 billion euros’ worth of demand from investors for the sale of a new 20-year bond on Thursday that a source said earlier was expected to raise 2-3 billion euros ($2.4-$3.6 billion).
Ireland has raised 7 billion euros so far in 2021, mainly through its first syndicated sale of the year, a 10-year deal investors piled into in January when the order book was in excess of 40 billion euros.
It plans to borrow 16-20 billion euros in 2021 to fund a huge increase in government spending to keep businesses and employees afloat during the COVID-19 pandemic.
This will lead to a budget deficit of 4.7% of gross domestic product (GDP) this year, the finance ministry forecast on Wednesday.
Thursday’s issue is the longest dated sale Ireland has placed via a syndicate of banks in almost two years and follows hot on the heels of long-dated issuance from Austria and Spain earlier this week.
Long-dated issuance has resurfaced after dying down in February when the bond sell-off driven by growth and inflation expectations hit longer-dated bonds particularly hard, as they are more sensitive to a rise in underlying rates. Bond yields move inversely with prices.
Price guidance on the bond, which will price later on Thursday, was revised to 14 basis points over the mid-swap level from 15 basis points, according to a lead manager memo seen by Reuters.
The initial guidance equated to a yield of around 0.62%, according to Reuters calculations.
Ireland’s National Treasury Management Agency mandated Barclays, BNP Paribas, Cantor Fitzgerald Ireland, Danske Bank, J.P. Morgan and Nomura as joint lead managers for the sale.
It is the first syndicated deal since the debt agency dropped Ireland’s largest stockbroker, Davy Stockbrokers, as a primary dealer in Irish government bonds following a record central bank fine for breaching market rules. ($1 = 0.8344 euros) (Reporting by Padraic Halpin in Dublin and Yoruk Bahceli in Amsterdam. Editing by Mark Potter)
