You are comparing the coupon on the April 2013 bond to the yield on three-month Treasury bills. You should be comparing the yield on both. The April 2013 bond is currently yielding around 0.5%. To buy €100 of this bond now costs around €101.50 and the seller would have to be paid around €3.25 for the interest accrued since the last coupon date.

That is paying €104.75 for something that will be worth €105 in April. The numbers are rounded but that is the annual return of 0.5%. I

f the bonds were trading below par then there might be some value in it provided you get can someone to lend to you at an interest below the yield on the bond you are trying to buy. But if Irish bonds were trading below par we would not be able to issue 3-month Treasury Bills at 0.5%.

Issuing Treasury Bills at 0.5% to buy something yielding 0.5% over the same term would simply mean a loss because of the transaction costs incurred.

I don’t know why the NTMA bought the bonds during the week. It might have saved some money but I doubt it. The difference between the 0.5% yield on the bond and 0.1% return on deposit would be reduced by transaction costs.

The reason Greece is undertaking a buyback is because the bonds are trading at a large discount relative to the par value. If Greece can borrow at say 4% and buy bonds yielding 20% then it can make a saving. We have no scope to do that.