Ireland's 1B euro bond sale gets strong deman

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Ireland sold 1 billion euros ($1.4B) of government bonds after receiving healthy demand which showed growing investor confidence in efforts to fix the euro zone's worst public finances. With total bids at 2.7B euros, the sale hit the top of a 750M to 1B euros range in the first auction since Finance Minister Lenihan started a tour of European financial capitals to talk the Irish investment case. 'It probably justifies the time that's been spent by the minister going around Europe to allay fears to investors the Irish economic situation isn't as bad as it's portrayed,' said Alan McQuaid, chief economist at Dublin-based brokerage Bloxham. Demand was much stronger than at the last auction on April 21, with the bid to cover ratio on 4% 2014 bond rose to 4.8 from 1.6 last month. A reopened 2019 bond was covered 1.8x, still higher than the paltry 1.1 ratio for a 2018 bond in April. David Schnautz, a bond analyst at Commerzbank in Frankfurt, said the successful sale bode well for preventing a buyers' strike emerging for euro zone government debt. 'The fact Ireland was able to raise the max. amount of the intended supply via an auction & that it managed to tilt the distribution between the two bonds to the longer end indicate growing confidence of investors in Ireland's ability to fund the ballooning deficit going forward," he said. Ireland raised over half of a total 25B euros in debt this year to help plug a ballooning budget deficit, which at 10.75% of GDP this year, is proportionally the worst in the euro zone. Ireland's debt to GDP ratio is set to rise to 59% this year, still low by European standards, from 43% in 2008 but that ratio will likely rise to over 100% once the gov