The EU has made a landmark issue of its first bonds to raise funds for Ireland's financial rescue package.

The European Financial Stability Mechanism (EFSM), which is under the auspices of the European Commission, raised €5bn.

The EU created the €60bn EFSM and the larger €440bn European Financial Stability Fund (EFSF) last year to fund Eurozone bailouts by raising money on bond markets. The EFSF is expected to begin issuing bonds later this month.

The yield, or interest rate, on the EFSM bonds was 2.5%, according to HSBC bank.

This is above that paid by Eurozone countries with solid finances but considerably lower than the 7.78% yield on Irish five-year bonds.

The EFSM bond placement is part of the €67.5bn of aid Ireland is to receive under its EU-IMF bailout agreed in November last year.