Ireland made €1 billion in two well-received bond sales today as sentiment towards the economy, the National Treasury Management Agency (NTMA) said today.
The NTMA said it will start fundraising for next year's likely €20 billion requirement in auctions this year.
The Government has raised all but €1 billion of this year's €25 billion bond sale target - €20 billion of new funding and €5 billion to refinance maturing debt.
"I think people are more and more certain that Ireland is dealing with the... problems that we have and the bonds have rallied significantly," NTMA deputy director Anthony Linehan said today. "Like all things that perform well people want to get on board."
Ireland is paying high yields to finance what is proportionally one of Europe's biggest deficits but the spread of 10-year Irish debt over benchmark German paper has dropped to around 160 basis points from 284 points in March as fears of an Icelandic-style bust recede.
Ireland remains, however, way off an average spread of around 20 basis points achieved over the past decade before a property bubble burst, triggering twin fiscal and banking crises and trashing Ireland's reputation as an economic golden child.
Mr Linehan said he expected the agency would have to raise about €20 billion euros in fresh funding for next year, the same as 2009, but this would depend on the government's 2010 budget plan, which will be unveiled in December.
Some €400 million of a re-issued 2014 bond were sold today, drawing bids nearly four times the bonds on offer. The yield fell to 3.393 per cent from 3.785 per cent at a previous auction in July.
Some €600 million was raised from a re-issued 2018 bond which was nearly three times oversubscribed. The yield dropped to 4.55 per cent from 5.082 per cent at a previous auction in April.
Alan McQuaid, chief economist at Bloxham Stockbrokers, said the NTMA's continuing success in raising funds, via syndication and auction, could not be guaranteed as Ireland's government faces a series of political challenges in the months ahead.
"There are a lot of minefields to be crossed between now and year-end," said McQuaid. "Any of those potentially could have a very negative impact on the overseas perception of Ireland."