March 13 - Ireland takes a big step towards meeting long-term funding targets as part of its EU/IMF bailout agreed to in 2010, but are current yields on its long term debt justified? Joel Flynn reports.
Good news for Ireland. The euro zone country has taken a big step towards exiting it's EU/IMF bailout. It's sold 5 billion euros of benchmark 10-year bonds in the first issue of long term debt since it was locked out of markets in 2010. The deal means Ireland has now raised most of its long-term funding targets for 2013. But Rabobank's Lyn Graham-Taylor says there's still a long way to go. SOUNDBITE: Rabobank Fixed Income Analyst, Lyn Graham-Taylor, saying (English): "From a sort of liquidity-driven perspective, people quite like the Irish credit. They look through the weaknesses and see it's an open export-driven economy, and they like that. And the fact obviously quite a significant pickup over the core. But we still see it as a yield convergence of the wrong kind. And Ireland, for example, its debt is still expected to reach I think nearly 123% of GDP this year. So I think these are yields that aren't justified on a fundamental basis." Ireland was bailed out in 2010 after a property and banking crisis. But since then it's hit every bailout target, and euro zone leaders are holding it up as a success story. Ireland's 10-year bond currently has a yield of just under 3.7 percent -- compared to 15 percent just two years ago. And Irish debt now attracts yields lower than Spain and Italy . A few years ago the luck o' the Irish seemed to have run out. Now it seems to firmly be back.