Bond yields ‘unlikely to fall further’
Irish bond yields have eased significantly over the past year to recently hit 5%. However, they are unlikely to go lower in view of the size of the budget deficit and the level of overall government debt. But that could change when the recapitalisation of the Spanish banking sector begins and there is more transparency on the implications for Ireland’s legacy bank debt.
“It will be very important to see how the capital gets allocated in the Spanish banks,” says Mr O’Reilly.
