Ireland's borrowing costs fell at an auction of €1.2 billion of six- and eight- month bills, the National Treasury Management Agency (NTMA) said today.
The agency sold €650 million of securities due January 14th, 2011, at an average yield of 1.367 per cent. That compared with 1.565 per cent at a July 8th auction of the same bills.
Ireland also issued €550 million of securities due March 14th, 2011, at an average yield of 1.8 per cent, compared with 1.898 per cent on July 8th.
"Sentiment has improved and it reflects in yield spreads and auction results in the euro region," said Huw Worthington, a fixed-income strategist at Barclays Capital in London. "This auction went very well, and the debt agency sold the bills at good rates."
The premium investors demand to hold Irish 10-year debt over the German equivalent, Europe's benchmark, widened to 278 basis points today from 276 basis points yesterday. It reached a euro-era record of 306 on May 7th.
Moody's Investors Service on July 19th cut its rating on Ireland's debt by one level to Aa2, citing "contingent liabilities from the banking system".
Bloomberg