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Ireland returns to 10-year bond market

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(Globalpost/GlobalPost)

Ireland on Wednesday returned to the 10-year bond market for the first time since it benefited from an international bailout in 2010, raising almost double the amount predicted by analysts.

Dublin raised five billion euros ($6.48 billion) in an auction, while the rate of interest was 4.15 percent, the country's National Treasury Management Agency said.

Of the bonds issued, 82 percent were taken up by foreign investors, with the rest from the domestic market, the NTMA said.

The foreign investors were mainly from Britain (25 percent), Germany (12 percent), the Nordic countries (12 percent), France (11 percent) and the United States (seven percent), the agency said.

More than 400 investors submitted bids totalling 13 billion euros.

Wednesday's auction was the first time that Ireland had raised money on the 10-year bond markets since the cost of borrowing for Dublin spiralled to unsustainable levels and forced the country to seek an 85-billion-euro rescue programme from the European Union and the International Monetary Fund in late 2010.

"Today's transaction -- particularly the size and breadth of the order book -- represents a strong vote of confidence by the international debt markets in Ireland," said NTMA chief executive John Corrigan.

"We are now well-placed to give investors the comfort of having 12 to 15 months' advance funding in place when the EU-IMF programme reaches its scheduled end. This visibility on our funding is vital."

The NTMA had on Tuesday announced plans to issue a 10-year bond maturing in March 2023.

The agency tested the bond markets in January, raising 2.5 billion euros in five-year loans, coupled with monthly short-term auctions.

"The successful bond auction is another important step on the path to Ireland regaining confidence in international financial markets," Paul McCann, managing partner of business advisory firm Grant Thornton, told AFP.

"It shows investors are taking seriously the measures the Irish government has introduced to get the nation's finances under control."

Issuing a 10-year bond is seen as a key step towards Ireland exiting its bailout programme.

The programme has regularly been praised by the EU and the IMF -- with Dublin hoping to be the first eurozone nation to exit a bailout by the end of this year.

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http://www.globalpost.com/dispatch/news/afp/130313/ireland-returns-10-year-bond-market-0