Ireland raises €1bn as funding costs hit record lows

Ireland returned to the global bond markets on Thursday morning, taking advantage of record low funding costs to raise €1 billion at auction at an average yield of 1.3 per cent.

The 30-year 2045 bond was initially sold via syndication on February 3rd at a yield of 2.088 per cent.

Ireland’s cost of borrowing continued to fall to new record lows this week, following the launch of the European Central Bank’s €1 trillion bond purchasing, or quantitative easing programme, which commenced on Monday.

On Thursday morning, Ireland’s 10-year bond yield fell to a new record low, down by 2 basis ponts to 0.699 per cent. The move was in line with other peripheral bond yields, with Spain’s 10 year yield reaching a record low of 1.11 per cent, the lowest since records began in 1993. The cost of funding for Portugal and Italy also touched record lows, down to 1.558 per cent and 1.084 per cent respectively.

The National Treasury Management Agency ( NTMA) has now raised € 9.5 billion on the markets this year, a significant part of its annual target of € 12 billion to € 15 billion. This means there will be limited new supply from the NTMA over the rest of the year.