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Ireland Raises 1 Billion Euros in First Bond Auction Since 2010

In January, Moody’s Investors Service restored Ireland’s investment grade, after a revival from the banking collapse that had threatened to destroy the economy and forced the nation to seek a bailout in November 2010. Photographer: Simon Dawson/Bloomberg
In January, Moody’s Investors Service restored Ireland’s investment grade, after a revival from the banking collapse that had threatened to destroy the economy and forced the nation to seek a bailout in November 2010. Photographer: Simon Dawson/Bloomberg

March 13 (Bloomberg) -- Ireland raised 1 billion euros ($1.4 billion) in its first bond auction since September 2010, cementing its return to international credit markets.

The Dublin-based National Treasury Management Agency sold the 2024 bonds to yield 2.967 percent, the organization said on its website. That’s the lowest on record for a 10-year auction. Investors bid for 2.9 times the amount of debt sold.

Ireland exited an international bailout plan in December, the first euro-area nation to emerge from a rescue, boosting confidence in the region’s recovery from its four-year debt crisis. Investors are returning to the markets they shunned during the financial woes. The average yield to maturity on bonds from Greece, Ireland, Italy, Portugal and Spain fell to 2.438 percent this week, the lowest in the currency bloc’s history, according to Bank of America Merrill Lynch indexes.

In January, Moody’s Investors Service restored Ireland’s investment grade, after a revival from the banking collapse that had threatened to destroy the economy and forced the nation to seek a bailout in November 2010.

“Irish bonds will continue to benefit from growth outperformance relative to the euro area,” said Anders Moller Lumholtz and Owen Callan, analyst at Danske Bank A/S, which is a primary dealer in Irish debt. “We also expect Moody’s to deliver another rating upgrade this year.”

The NTMA raised 3.75 billion euros in a sale of a 2024 bond via banks in January at a yield of 3.543 percent. In the secondary market, the 10-year yield has fallen from a euro-era peak of more than 14 percent in July 2011, setting a record-low of 2.99 percent today, as the government reined in its budget deficit and real-estate prices began to stabilize under the bailout program.

To contact the reporter on this story: Dara Doyle in Luxembourg at ddoyle1@bloomberg.net

To contact the editors responsible for this story: Daniel Tilles at dtilles@bloomberg.net Paul Dobson, Mark McCord

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