Wednesday, March 13 14:38:59
Ireland took its biggest step yet towards exiting its EU/IMF bailout by selling 5 billion euros of benchmark 10-year bonds, its first issue of such long term debt since it was locked out of markets in late 2010.
The issue was as much as double the size that many traders had predicted, and was significantly oversubscribed with offers of least 12 billion euros, a source close to the deal said.
"This shows Ireland has firmly returned to the market," said a trader who took part in the deal. "It sends an important signal."
The deal means that Ireland has now raised most of its long-term funding target for 2013.
Bailed out in late 2010 after being overwhelmed by unprecedented fiscal and banking crises, Ireland has hit every major target since and has been held up by euro zone leaders as the success story their austere plans desperately need.
The National Treasury Management Agency (NTMA), which began borrowing again from capital markets last year, has earmarked the 10-year issue its most significant step towards a full market return.
Traders said the new debt would yield around 4.15 percent, compared to a yield of 3.7 percent on Ireland's current benchmark 2020 bond.
At the height of bailout fear less than two years ago, the yield on the 2020 bond had stood at more than 15 percent.
Ireland already took a major step towards ending support from the EU and IMF in January by raising more than a quarter of its long-term funding target for this year with the sale of 2.5 billion euros of five-year debt.
The country's steady market return has been helped by a sharp fall in Irish bond yields over the past 18 months. Irish debt now trades with yields below the equivalent levels for Spanish and Italian government bonds, two fellow euro zone strugglers which have avoided sovereign bailouts.
Yields on Ireland's current benchmark 2020 bond fell further last week after European Union finance ministers agreed to look at how to extend the maturity of emergency loans Ireland and Portugal have received under their bailouts.