According to Bloomberg, Irish prime minister Brian Cowen says that his government decided to cancel all bond auctions for the rest of the year because of “turbulence” in bond markets. In addition, the state is already funded into next year, Cowen says.
“We are funded until next May,” Cowen said when he made the comments in an interview with national broadcaster RTE, Bloomberg reports.
“There has been such turbulence in the markets, since we don’t require those funds immediately why would we be going to get funds at rates such as 6.8 or 6.9 percent,” he said.
Yields for Irish bonds retreated lower after the government confirmed expectations of the total cost for Anglo Irish bailout to fall into the €30-35 billion range.
The 5yrs CDS for Ireland was about 15 bps tighter as well, quoting at 455 bps in late hours of Thursday’s trading.
“There is still uncertainty around the fate of subordinated debt-holders for Anglo Irish but their “contribution” to bailout costs are expected to be substantial,” Otis Casey, vice President at Markit writes in a update.
- Ireland Faces Mammoth Bank Bill (nytimes.com)
- “Ireland warns of Anglo Irish rescue bill” and related posts (financemarkets.co.uk)
- Irish Woes Get Worse (theatlantic.com)