International borrowing costs fall as split announced

THE cost to the Government of borrowing on the international markets fell slightly yesterday after plans to split Anglo Irish Bank into two separate entities were revealed.

The rise in Government bonds relative to benchmark German bonds narrowed the so-called yield spread by two basis points to 371 by late-afternoon in London after widening to a record 377 basis points earlier in the day.

The moves followed news that Anglo Irish is to be split into a funding bank and an asset recovery bank.