THE NATIONAL Treasury Management Agency (NTMA), which manages Ireland’s debt, raised a further €1 billion yesterday in an oversubscribed auction, bringing the State closer to its €25 billion funding target for 2009.

The agency sold €300 million of 4 per cent 2014 treasury bonds. The level of demand for these bonds was four times higher than the amount allocated.

A further €700 million was raised through the sale of 4.5 per cent 2020 treasury bonds, and the total bids received were 2.3 times this amount. The 2014 bond was sold at an average yield of 3.312 per cent while the 2020 bond was sold at an average yield of 4.913 per cent, the agency said yesterday.

This sale was the third in a series of five monthly auctions due to take place during the second half of 2009. Alan McQuaid, chief economist with Bloxham stockbrokers, said the latest auction was all the more impressive because unlike recent agency bond sales, Ireland “doesn’t have the field to itself this week as regards Euroland bond issues”.

Mr McQuaid explained that an estimated €16 billion in new bonds was to be sold by a number of eurozone countries over the coming days.

However, while the agency has been successful in raising funds this year, he pointed out that Ireland is still paying a premium over German bonds as a result of its “precarious finances position”.

Mr McQuaid also warned against becoming complacent about borrowing.

“The huge levels of debt we are building up are unsustainable in the long run,” he said.