* 'Core' issuers Austria, Netherlands easily sell bonds
* Ireland takes big step closer to funding independence
* Spain announces tough 121 bln euro 2013 bond funding plan
By William James
LONDON, Jan 8 Investors snapped up a wave of new
euro zone sovereign bonds from across the credit spectrum on
Tuesday, including Ireland's latest step back into long-term
German bond prices were marginally higher on the day,
stabilising after a steep selloff last week and there was plenty
of demand for low-risk bonds at auctions by the Netherlands and
"The Dutch issue was taken down very well and the same for
Austria, and now we see other issuers taking advantage of the
tailwinds to go forth with their issuance," said Michael
Leister, senior strategist at Commerzbank in London.
Cashing in on the issuance rush, Belgium announced that it
would sell a new 10-year bond via syndication rather than
holding its planned late-January auctions.
Bund futures were 10 ticks higher on the day at
143.06 while the price of bonds issued by the region's
lower-rated states such as Italy and Spain were also slightly
The day's price action highlights markets are keen to both
buy up ultra-low risk assets at cheaper levels and invest in
riskier assets to secure a higher rate of return - a reflection
of the euro zone's mixed outlook for 2013.
Those who believe the worst of the region's three-year debt
crisis has passed could take heart from the strong demand for
Ireland's latest bond issue - a 2.5 billion euro syndicated tap
of its 2017 bond, which drew orders worth over 7 billion euros.
Ireland looks like becoming the first sovereign to
successfully exit a euro zone bailout programme and is expected
to issue around 10 billion euros of debt this year.
"It was an excellent deal for Ireland ... There was a decent
spread of demand across geographies. We've seen a few accounts
getting back involved after the two-and-a-half year hiatus from
the (Irish debt agency)," a trader said.
Irish five-year yields initially rose ahead of
books opening on the deal but the strong demand saw the bonds
recover early losses to trade flat at a yield of 3.36 percent.
Elsewhere in the periphery, Spanish and Italian 10-year
benchmark yields were lower on the day, down 4 basis points at
5.08 percent and 7 bps lower at 4.28 percent
TOUGH SPANISH TARGET
Spanish yields fell even as Madrid unveiled its sizeable 121
bln euro funding target for the year - a 7.6 percent increase on
the amount it raised in 2012 that highlights the country's
The weight of issuance is one factor, alongside sliding
credit ratings and worsening economic performance, expected to
determine whether the country can survive 2013 without turning
to international lenders for assistance.
"The number is on the high side and it's a bit of an
eyecatcher given the stark increase yet again," said
"In combination with last week's announcement of the new
two-year line it shows that they're not completely out of the
woods yet and some caution is warranted."
Spain will kick off its funding campaign with the launch of
a new two-year bond on Thursday, with some analysts looking at
the choice to sell short-term debt as a safe option given the
market's current positive mood.