May 9, 2019 / 8:55 AM / 2 months ago

Ireland opens syndicated sale of new 2050 bond

DUBLIN, May 8 (Reuters) - Ireland began the syndicated sale of a new 2050 bond on Thursday that a source said could raise around 3 billion euros.

It opened books on the benchmark issue at 50 basis points over mid-swaps, lead bankers on the deal said. That implies a yield of around 1.55 percent, according to current pricing.

Ireland, which has already raised over 5.5 billion euros of a planned 14 billion to 18 billion euros of long-term debt issuance this year, said on Tuesday it planned to issue the new bond in the near future.

The syndicated deal replaces a bond auction that had been scheduled for Thursday after Cyprus’s recent first 30-year bond sale was overloaded with orders.

The use of syndication broadens the investor base for the bonds, allowing smaller euro zone countries to compete with the larger countries that can attract demand because of their benchmark status. Using banks to find demand should also help secure more aggressive pricing and ensure liquid trading.

High demand for long maturities — with Ireland an active seller in recent years — shows how much Europe’s bond market is adjusting to expectations of persistently low interest rates and central bank stimulus.

Barclays, BNP Paribas, Cantor Fitzgerald Ireland Ltd, Danske Bank, Deutsche Bank and Goldman Sachs are joint lead managers for the transaction. (Reporting by Graham Fahy in Dublin, Abhinav Ramnara in London; editing by Larry King)

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