Major boost for Ireland as bonds boom

There was a significant bost for Ireland today as 10-year government bond yields fell to eight-year lows as the country’s first debt sale since it exited an international bailout drew strong demand.

Major vote of confidence in Ireland

Investors bid more than €9 billion for the new 10-year bond, outstripping supply by almost a three-to-one ratio. Final bond pricing will be set later today.

The new bond was offered with an yield of about 3.5%, representing a small premium over Ireland’s current 10-year benchmark.

Moody’s, the only big agency to rate Ireland below investment grade, is due to review its ratings on January 17.Some analysts said the deal offered proof of increased market access and should be supportive for Ireland’s credit ratings

The sale will be Dublin’s first bond issue since March 2013, when it sold €5 billion in a 10-year transaction. It is being seen as a bellwether both for investor confidence in Ireland’s ability to go it alone after it successfully exited its bailout in December, and market appetite for the debt of other countries in Europe’s periphery.

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