Irish-German Bond Yield Spread Widens to Record on Bank Concern

Irish 10-year bonds fell and German bunds surged, widening the so-called yield spread to a record and surpassing the level it reached before the European Union and International Monetary Fund announced a rescue plan in May.

The yield on Irish 10-year debt rose 13 basis points relative to benchmark German bunds to 318 basis points. Investors are concerned the cost of rescuing Anglo Irish Bank Corp. will exceed the maximum 25 billion euros ($32 billion) forecast by the central bank, which is equivalent to 15 percent of the nation’s annual gross domestic product and 75 percent of its tax take.