The National Treasury Management Agency (NTMA) has once again mandated Davy Stockbrokers to act as a primary dealer in Irish government bonds
The NTMA dropped Davy from the list of financial firms allowed to act as market makers in bond auctions in 2021 after it was hit with a record fine from the Central Bank of Ireland for breaching market rules.
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The brokerage was found to have breached the rules after an investigation by the Central Bank discovered that the firm acted as both broker and buyer in selling Anglo Irish Bank bonds owned by a client, Belfast businessman Paddy Kearney, in 2014 to a consortium of 16 staff, including top executives, without telling him or the firm’s own compliance team they were the buyers.
The regulator concluded that Davy acted “in a reckless manner” by failing to identify and manage a potential conflict of interest.
Bank of Ireland agreed to buy most of the Davy business later in 2021. The firm now operates as a subsidiary within the banking group.
In a statement, the NTMA said Davy would be recognised as a primary dealer from February 28th next, allowing it to bid in the issuance of government bonds and bills. and act as market makers on the major electronic trading platforms.
Commenting on its mandate, Damian Roddy, head of capital markets, said: “This recognition by the NTMA follows substantial investment in a highly experienced fixed income team, building on Davy’s long-standing support for Irish debt capital markets.”
The NTMA noted that the 15 primary dealers were Barclays Bank Ireland, BNP Paribas, Bank of America Securities Europe, Cantor Fitzgerald Ireland, Citibank Europe, Danske Bank, Davy, Deutsche Bank, Goldman Sachs Bank Europe, Goodbody Stockbrokers, HSBC France, JP Morgan, Morgan Stanley Europe, Nomura Financial Products Europe and NatWest Markets.
The NTMA secured more than €36 billion of orders from international investors last month for €3 billion of bonds it put up for sale.
The bonds, which are due to mature in 30 years’ time, were priced to carry an interest rate – or yield – of 3.154 per cent.
“Today’s 30-year bond transaction demonstrates continuing strong investor appetite for Irish Government bonds,” said Dave McEvoy, director of funding and debt management at the NTMA.
