Irish Bond Auction Comes In Strong

children ireland

Photo: kthypryn on flickr

Ireland’s auction of 1.5 billion euros in debt was completed today, at a lower yield than previously. The issue included both four- and eight- year bonds.The bid-to-cover was 5.1x, which means there was over 5x the demand as there was supply for the bond issue. This was lower than a previous auction, which had a bid-to-cover of 5.4x according to Bloomberg.

The initial reaction from Ireland’s issue was positive, with the spread vs. German bonds shrinking moderately. Credit Default Swap (CDS) spreads also came down, falling to 418 basis points, down 21, according to Markit.

This should help ease concerns that the nation will need financial support from the Eurozone or IMF, though even ahead of the auction the Irish government was already fully funded into 2011.

Ahead of the auction spread between Irish and German debt was at one point the widest it had been since 1991, and Irish yields hit 6.56%, but then tightened to around 6.30% right ahead of the release.

The euro appears to be holding onto its earlier gains post-auction, and the Irish 10-year yield has fallen further, to 6.26% as of 5:27 AM ET.


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