Welcome, 77 artists, 40 different points of Attica welcomes you by singing Erotokritos an epic romance written at 1713 by Vitsentzos Kornaros

Wednesday, January 8, 2014

Ireland makes storming return to international bond market

Bumper demand for Republic's first debt sale since exiting bailout helped drive down yields across eurozone's periphery

Ireland made a storming return to the international bond market on Tuesday as the bumper demand for the country's first debt sale since exiting its bailout helped drive down yields across the eurozone's periphery.

The country's NTMA debt agency sold off €3.75bn of bonds but investors bid more than €14bn (£11.6bn) for the new 10-year bond – nearly four times the amount being sold.

The bond – the first Dublin has sold since last March – had a yield of just over 3.5%, and marked a substantial step towards the target of raising up to €10bn this year.

"This sale shows Ireland has fully exited the EU/IMF [bailout]," Michael Noonan, the finance minister, said in a statement.

"The yield of 3.54% illustrates the strength of Ireland's international reputation and brings us far closer to the borrowing rates of the strongest European economies."

Ireland's cost of borrowing over 10 years has tumbled from a peak of about 15%, which was reached in 2011 as the eurozone's debt crisis intensified.

The sale is a test of market confidence in Ireland's recovering economy – which grew 1.7% year-on-year in the three months to September – and also sets a benchmark for Greece, Portugal and Cyprus, the eurozone states still under sovereign bailout programmes.

"Such extremely heavy demand reinforces the recent positive sentiment towards Ireland," said Ryan McGrath, a Dublin-based bond dealer at Cantor Fitzgerald.

"This bodes well for upcoming issuance by other eurozone peripheral countries."

Yields on Spain's 10-year benchmark bond fell nearly 10 basis points to 3.81%.

"The deal has attracted a lot of international interest, and with many of those orders unable to be filled, these investors have had to look elsewhere," said Dan Shane, head of SSA syndicate at Morgan Stanley, one of the banks leading the deal.

BondsEurozone crisisFinancial sectorEuroIrelandEuropean © 2014 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds