Bank of Ireland has raised €500 million following an auction of five year unguaranteed bonds.

The auction closely follows the National Treasury Management Agency's success with a ten-year bond auction earlier this week.

The bank said it closed the books on its five-year covered bond 30 minutes after they were opened today.

Covered bonds are considered a secure form of investing because they are backed by assets. 

Bank of Ireland said the bond was "backed by a pool of 100% Irish residential mortgages".

Today's transaction, which shows that Irish banks are becoming less reliant on central bank funding, attracted €2.25 billion of orders.

185 investors purchased the bond, 52% of which were asset managers. 32% of buyers came from Germany or Austria.

"It made sense for Bank of Ireland to come to the market after the success of the sovereign," said Jez Walsh, head of covered bond syndicate at RBS.

"It's a natural evolution of the bank's progress for it to extend out to the five-year maturity,'' he added.

Bank of Ireland, in which the Government has a 15% stake, was the country's first bank to return to the bond markets, and it issued a €1 billion covered bond last November.

It also issued a €250 million tier 2 subordinated deal in December 2012.

Its move back into the markets was quickly followed up by AIB.