Markets lap up Irish debt as state recovers

Tim Wallace
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THE EUROZONE’S bailout fund raised funds successfully yesterday, issuing three-month debt at negative yields, indicating strong support for the paper.

And Ireland’s government took a big step towards recovery, easily covering a €2.5bn (£2.04bn) issue of debt maturing in 2017.

It received orders totalling over €7bn, a strong reception for the state’s first long-term issuance since the 2010 bailout.

That puts this year’s €10bn fundraising plan on a strong footing and indicates the country may soon be able to exit the bailout program.

The European Stability Mechanism (ESM) launched its short-term funding programme with a three-month bill auction.

It raised €1.927bn with a weighted average yield of minus 0.0324 per cent – with investors effectively paying to lend money to the Germany-backed bailout fund.

Part of that success came from the Japanese government’s participation, with the country’s finance minister Taro Aso pledging to buy ESM debt regularly with the state’s foreign reserves.

Meanwhile Austria and the Netherlands also tapped the bond markets successfully, showing investors have relaxed in the wake of last month’s deal on Greek finances.