The European Union yesterday placed a 20 year €3 billion bond for Ireland and said it saw strong investor demand for the placing.
The €3 billion bond matures on April 4, 2032, pays interest of 3.375% and was priced at the lowest end of the initial price guidance.
The EU said the investor demand came mainly from within the EU, with 48% of an allocation going to Germany/Austria followed by UK/Ireland with 30%. In terms of investors, asset managers as well as pension and insurance funds each had 32% of the allocation followed by banks with 19%, central banks with 13% and others with 4%.
This latest bond is the second issuance this year after a first transaction of €3 billion with 30 years maturity for both Ireland and Portugal.
The funds will be lent to Ireland after a successful conclusion of the fifth bail-out programme review as part of the financial assistance package agreed in December 2010.
IMF releases next €3 billion in bail-out funds
Earlier, the International Monetary Fund said it was releasing another €3.23 billion in loans to Ireland following a review of the bail-out programme.
The Fund said the completion of the review and the disbursement of the latest loan brings the total loaned to Ireland by the IMF since the start of the bail-out to more than €16 billion.
The IMF said that Ireland achieved its aim of lowering the budget deficit last year, did so at a faster rate than planned and was on track to bring the deficit down this year to the targeted level of 8.6% of national output.
The IMF also said the challenges Ireland faces have intensified since the start of the programme with growth expected to be only 0.5% this year.
David Lipton, first deputy managing director of the IMF, said in a statement that if growth should weaken further, the automatic stabilisers should be allowed to operate to help avoid jeopardising the recovery.
This seems to suggest that the IMF may not see a need to make major changes to the tax and welfare system if growth weakens, as this could derail the already fragile economy.
