The National Treasury Management Agency's bond switching programme has received a strong response from investors, with almost all bond holders switching their money out of old stocks into the new issues.

Some 96 per cent of holders of the old 2012 bond took up the offer to switch, as did 97 per cent of 2015 bond holders. They moved their funds into new 2010 and 2016 issues. Mr Fionan Coleman, deputy director of funding and debt management at the agency, said the level of participation had exceeded its expectations.

"The background work has paid off, we had to delay the process a little but it was worthwhile to get the detail in place," he said. Stage two of the switch programme is now coming up next week.

According to Mr Oliver Mangan, bond economist at AIB, the remaining couple of per cent who did not avail of the switching terms probably represent private investors and small investors, who would probably do better to keep the old bonds for the higher returns. "But virtually every fund manger here and abroad has participated."

The NTMA also managed to set a very good price for the first of its three rounds of switches into new bonds, meaning the interest rate at which the money was raised was relatively low. The 4.26 per cent achieved for 10-year paper is exactly the same as the price of the equivalent paper in Finland and Holland.

Next week switch terms for the medium date bonds will be announced followed by the shorter dated coupons a week later again. The NTMA issued about £1.9 billion into the new 2010 stock and £3.46 billion of the 2016.

Next week terms will be offered to switch the old 2006 and 2008 bonds into the new 2010 followed a week later by terms for the old 2002 and 2005 bonds. The switching programme also looks on target to deliver the large increases in liquidity demanded by foreign fund managers, to make it easier for them to trade in our national debt. At the moment the majority of the debt is held by Irish institutions.