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September 21, 2010 at 11:00 AM
Higher yields sang a siren song to investors snapping up the latest Irish bonds at Tuesday’s auction, soothing just a bit of the worry surrounding Ireland’s financial condition.
While analysts called the rates, 1% higher than in previous sales, unsustainable over the long haul, the issue nonetheless bought time for the beleaguered nation as 1.5 billion euros’ worth of bonds maturing in 2014 and 2018 sold strongly, Reuters reported.
The sale also eased the premium that investors had been looking for to choose Irish bonds over German bunds; in fact, gilt futures had been up before the auction, but the strong showing of Irish paper caused them to lose most of the gain. Bunds, which had also been up early on, found the spread narrowed to just under 67 basis points.
