Outlook positive for Ireland’s bonds

THE lowest eurozone debt supply this year – up to €1 billion from Ireland – will next week bring relief for investors weary from the endless torrent of paper being fanned by recession-hit sovereign issuers.

Although there will be no redemption of maturing government bonds next week, coupon payments will total €2.5bn and, for a second successive week, overshoot issuance, helping whet investors’ bond-buying appetite.

Given that Ireland’s 10-year debt yield has the widest premium among eurozone states over currency bloc benchmark German Bunds at 218 basis points, it bodes well for sale of Ireland’s bonds.