Dublin said the demand for benchmark 10-year bonds meant the time was rapidly approaching when it would no longer have to rely on external financing
Ireland's hopes of becoming the first eurozone country to emerge from a financial crisis bailout received a boost on Wednesday following a successful €5bn (£4.33bn) bond sale that will meet the country's financing needs until well into 2014.
Reinforcing its reputation as the "poster child" of Europe's austerity programme, Dublin said the demand for benchmark 10-year bonds meant the time was rapidly approaching when it would no longer have to rely on external financing to cover its borrowing.
The Irish finance ministry announced that there had been €12bn of bids for the bonds offered in the first sale of 10-year stock since 2010. The yield (interest rate) of 4.15% was half a point below that faced by Italy, which struggled to find buyers for its debt.
"There has been an extraordinary response to it and I don't think you will have heard me use the word extraordinary before," said Michael Noonan, Ireland's finance ministry.
"This brings us within about a billion and a half towards what we need to the end of 2014. That puts us in a very strong position. A lot of ministers visiting various countries for Patrick's day will have a fairly impressive piece of news."
Ireland, along with Greece and Portugal, was bailed out by the International Monetary Fund, the European Central Bank and the European Union following the financial crisis of 2008. The former "Celtic tiger" was forced to accept draconian terms in return for an €85bnloan to cover the cost of supporting a banking system ravaged by a boom-bust in the housing market.
After complying strictly to the terms of its rescue package, Dublin started to sell small tranches of short-term bonds in 2012 but saw yesterday's sale as a key test of financial market confidence.
The government had already raised €2.5bn from a sale of five year debt in January and a further €1.3bn from selling state-rescued insurer Irish Life last month. Following Wednesday's sale, Dublin has now raised most of the €10bn it has targeted to raise this year.
By contrast, the political uncertainty in Italy since last month's inconclusive election meant bond yields rose in the first auction since the country saw its credit status downgraded by Fitch, the ratings agency to BBB+. At the auction, Italy offered an average yield of 2.48% for its three-year bonds, the highest level since December.
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