The Irish National Treasury Management Agency (NTMA) announced today that Ireland had successfully issued a new 10-year €6 billion benchmark bond. The bond was issued through a syndicate group of six of Ireland’s primary dealer banks. The annual yield is 5.9%. It's a sign of the times that raising debt is lauded as a "great success."

This issue represents the third syndicated bond issue by Ireland in 2009 and brings to €16 billion the total amount raised by syndication this year. On 8th January €6 billion of a 5-year bond (4% Treasury Bond 2014) was issued through syndication while on 25 February €4 billion of a 3-year bond (3.9% Treasury Bond 2012) was likewise issued through syndication.

The new bond, the 5.9% Treasury Bond which matures on 18 October 2019 was sold at an issue price of €99.794 per €100 nominal, for an annual yield of 5.932%.

Irish investors accounted for 22% of the uptake of the bond.

The Chief Executive of the National Treasury Management Agency, Dr. Michael Somers said: "We are very pleased with the great success of the new bond issue. We are particularly pleased that Ireland could secure substantial long term funding in the very competitive conditions which now prevail in the Government bond markets. The success of this bond issue is a clear signal of the confidence investors have in the Irish Government bond market. We are also pleased to have secured the bulk of our funding requirement for this year."

Somers says in a report on the Irish economy:"Ireland has a record of prudent fiscal policy."

The statement is simply not credible.

The NTMA said in addition to the €16 billion raised through syndications Ireland has also raised €4.7 billion this year through a series of regular scheduled bond auctions. Ireland plans to raise in the region of €5 billion to €6 billion of funding from the five remaining monthly bond auctions which will be held in the months of July through November this year. This funding programme effectively meets Ireland’s funding needs as announced in the Supplementary Budget on 7 April 2009 as well as the refinancing of a €5 billion bond which matured in April.

The ratio of General Government Debt to GDP for Ireland was 43.2 per cent at end 2008, which is 18 percentage points below the EU average. Deducting the value of the National Pensions Reserve Fund and other funds managed by the NTMA from the gross debt would give a Debt/GDP ratio of around 32 per cent at end 2008.

GDP, which includes the large multinational sector, is about 20  per cent higher than GNP -  - a more useful measure.

The gross funding requirement in 2009 is approximately €25 billion. This amount is required to fund an Exchequer deficit of about €20 billion, including expenditure of €3 billion associated with the recapitalisation of the Irish banks and a bond redemption of €5 billion in April.

The National Debt was €54.2 billion at end March 2009. It is forecast to increase to €70.9 billion by the end of 2009.