Ireland returns to bond market for first time since bailout

The Republic of Ireland has returned to the capital markets for the first since it received an international bailout in 2010.

Ireland was given a €85bn (£68bn) EU bailout following the collapse of its banking sector.

Today, the country’s debt agency raised €500m in a short-term debt auction. The National Treasury Management Agency (NTMA) said it was “encouraged” by the level of interest, the BBC reports. 

Ireland auctioned three-month treasury bills at a yield of 1.8%, lower than the equivalent Spanish debt.

John Corrigan, chief executive of the NTMA, said he was encouraged by the strong international demand for Irish bonds and their competitive interest rate.

However, he added the auction is “only the first step” towards Ireland’s ultimately goal of full access to the capital markets.

In contrast to Greece and Portugal, the Irish Republic had not sold any short-term debt in the aftermath of its eurozone bailout. The 1.8% average yield was lower than the 2.36% average yield on Spanish three-month debt, indicating markets have greater confidence in Ireland’s ability to repay its creditors.

A Spanish bond auction today saw €3bn of debt sold, but the average yield on a 10-year note rose to 6.43%, up from 6.04% at the last auction on 7 June.

 

This article was first published on Investment Week

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