IRISH LIFE & Permanent (ILP) has raised a further €1 billion from the sale of a bond maturing in September 2010 under the terms of the Government bank guarantee.

The cost to the company was 190 basis points, or 1.9 percentage points, over the “midswaps” rate, the benchmark rate in the international bond market.

ILP is the fourth guaranteed financial institution to tap the bond markets for a second time using the Government guarantee.

The sale of the bond, which carries a coupon of 3.75 per cent, was managed by BNP Paribas, Citigroup and Deutsche Bank.

A spokesman for ILP said the bond had been fully subscribed and that the fundraising reflected positively on the company.

The cost to the company of raising a €1 billion bond last February was 175 basis points above the benchmark midswaps rate.

ILP will outline any increase in its bad debt provisions in a trading update on Friday to coincide with the annual meeting later that day.

The Government is expected over the coming weeks to guarantee the sales of individual bonds maturing after the State bank guarantee scheme expires in September 2010. Most of the guaranteed institutions are expected to participate in the long-term fundraising following the move.

Irish Nationwide was the most recent financial institution to approach bond investors for a second time using the State guarantee scheme. It raised €750 million last week at a cost of 200 basis points over the benchmark rate.

AIB and Bank of Ireland each raised €1 billion in recent weeks – in addition to the €2 billion raised by each last year – taking advantage of more favourable conditions in the bond markets.

The difference in yield, or spread between 10-year Irish Government bonds and the equivalent German securities, has narrowed sharply in recent weeks from wide margins in the middle of March.