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January 21, 2013 / Admin

More on Irish Recovery

Interesting article and graphic from Fisher Investments on Ireland’s finances, and strides they have made to manage their debt – Thomas Ek, Vice President,
Fisher Investments

The Other Fightin’ Irish

While one Irish team saw their hopes swept out with the tide Monday night, another is seemingly poised for a better spring: Ireland is nearing a full return to debt markets and continues planning to launch a new benchmark 10-year bond. In fact, progress was made along those lines Tuesday when Ireland launched its first syndicated bond deal since its bailout in late 2010. This follows its first medium-term debt offering, which was made last summer.

Combined with Irish yields, the news paints a picture of a country which has made significant progress since a property market crash tied to 2008’s global financial crisis caused Irish lenders Anglo Irish Bank Corp. and Irish Nationwide Building Society to effectively fail. As shown in Exhibit 1, Irish yields have fallen meaningfully—and the spread between Irish bonds and German bonds has narrowed significantly, falling from a high of over 11 percentage points to under 3 (2.85, to be precise). In fact, Irish yields are now below Spain’s and are effectively equal to Italy’s.

Exhibit 1: Peripheral European 10-Year Yields

European 10 year yields

Source: Thomson Reuters, as of 1/8/2013.

Full article:  The Other Fightin’ Irish

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