The National Treasury Management Agency has sold over €1 billion in its first ever sale of amortising bonds.
The average yield on the total amount issued was 5.91% and the five different bonds had maturity dates ranging from 15 to 35 years.
The NTMA said these types of bonds are designed to meet the needs of the Irish pension industry, whose natural demand is for long dated bonds.
''We are pleased with the result of today's launch of this funding product, which marks a diversification of Ireland's sovereign funding programme and another step on the road to full access to the bonds markets,'' commented the NTMA's chief executive John Corrigan.
He said the success of today's sale shows the willingness of Irish investors to increase their holdings of Government debt and added that more amortising bonds will be issued at a later stage.
Mr Corrigan said that today's sale combined with the NTMA's recent bond switch and the bond sale in July has reduced the country's ''funding cliff' of €11.9 billion, which had been due in January 2014, to just under €2.4 billion.
Unlike traditional bonds which pay a coupon each year and a principal at maturity, the amortising bonds will make partial principal and interest payments of equal amounts every year over their lifetime, making them attractive to pension funds.
Commenting on today's sale, Finance Minister Michael Noonan said that as well as providing funding to the State, the amortising bonds will also provide a stable return to pension funds and will assist trustees in addressing deficits in pension funds.
''This offering builds upon the successful bond auction in July, which was well supported by international investors, and highlights the fact that confidence in Ireland and our ability to emerge from the programme and return to a more normal funding cycle is building at home and abroad,'' he said.
He said that a successful return to full market funding at competitive rates is an essential step on the country's economic recovery.
''In addition to providing the necessary funds to finance the State, it will enable our banks and other institutions that are relying on the international markets for funding to fully rengage with the international markets and to access funding at competitive rates. This will benefit all households and businesses," he added.
Owen Callan, senior dealer at Danske Markets has reacted positively to the bond issuance.
He said, "This is a very positive result, slightly higher than expected, with Irish pension fund sector reacting less cautiously than had been envisaged.
He also added that the amount the NTMA expects to raise of between €3-5 billion over the next 18 months from the amortising and inflation linked bonds could, according to some pension fund sources, raise up to twice that amount.
