Almost 77 per cent of the funds invested in the 2010 Treasury bond, more than €4.7 billion (£3.7 billion), was switched into the new 2013 bond when the National Treasury Management Agency (NTMA) announced terms for the transfer yesterday. There was a lower take-up of the new 2007 bond, with just over 56 per cent of the funds in the 2005 bond, or just under €3.1 billion, moving to the new bond so far.

NTMA said it was very pleased with the take-up of the new bonds.

"We were asking investors to lengthen their investment term in difficult markets where there are concerns about possible interest rate increases, so we were pleased to get such a big take-up at the price we offered," NTMA director of funding and debt management Mr Jim Farrell said. "It has worked very well and created a good foundation for our bond auctions in coming months."

NTMA wanted investors in the 3.5 per cent Treasury bond 2005 to switch into its new 4.25 per cent 2007 bond and investors in the existing 4 per cent 2010 Treasury bond to move into the new 5 per cent 2013 bond.

NTMA bought back the 2010 bond at €93.72 per €100 nominal of stock and sold the 2013 to investors at €98.76 per €100, a discount of €1.24. When the 5 per cent coupon (fixed-interest rate) announced on Wednesday is taken into account, the yield on the new 2013 bond is 5.151 per cent. The yield on the new 2007 bond is 4.686 per cent.

NTMA bought back the 2005s at €97.41 per €100 of stock and sold the new 2007 at €97.88 per €100, a discount of €2.12. The 2007 stock carries a coupon of 4.25 per cent.

The 2013 bond has been issued at a yield 30 basis points over an extrapolated German bond of around the same maturity, at a yield in line with Spanish bonds of comparable maturity and at 0.6 basis points over the Belgian yield, Mr Farrell explained.

The yield on the 2007 is 29 basis points over an equivalent German bond, and 1.2 basis points under the Spanish yield, he said.

Commenting on the lower take-up of the 2007 stock, Mr Farrell said this bond could be taken over the €5 billion threshold required for quotation on the Euro MTS market after about three of the monthly bond auctions that NTMA will start next month.

At €4.7 billion, the take-up of the 2013 means the bond will be able to get a quotation on the Euro MTS in June, which will add to the profile of the NTMA in the euro bond market and ensure the bond is highly liquid - easily traded - for investors. Following yesterday's switching, the 4 per cent Treasury bond 2010 is no longer a benchmark stock because more than 60 per cent of the funds have transferred into the 2013.