Bonds easing pressure on Irish debt

As Ireland’s chances of a refund on the cost of saving its banks fade, bond investors are helping the Government’s latest plan to reduce the debt burden.

Next month, Finance Minister Michael Noonan will start fleshing out a proposal to repay about €15bn of bailout loans from the IMF early, partly using cheaper money raised in the bond market. Last week, the yield on Ireland’s benchmark 10-year government bonds fell below 2% for the first time.

Ireland is due to repay the last IMF bailout loan in 2023 and refinancing may save as much as €375m a year, Mr Noonan said last month. Any financial benefit may also help mitigate concern over the slowing momentum behind efforts to claw back some of the €64bn bank rescue bill from the eurozone’s rescue fund.