Madam, – When considering the possibility of Ireland’s return to the bond markets in 2012 it is interesting to note that Iceland is this week poised to raise US$1 billion from the markets for the first time since the financial crisis.
Having become a supposed international pariah by allowing its banks to default, Iceland nevertheless sees sufficient investor demand to expect to issue a five- year bond at a very affordable interest rate of 5 per cent (substantially cheaper than Ireland’s bailout funding). Your readers may be interested to note that yields on existing Irish five-year bonds yesterday stood at 11.5 per cent.
Perhaps our Government’s objective of returning to the bond markets in 2012 might be considered more credible if Ireland were to follow Iceland’s example in resolving its banking crisis by making creditors (not the State) bear the losses of financial sector bankruptcy. – Yours, etc,