Irish bond yields rise for first time since auction return

Reuters - UK Focus

* Ireland (Other OTC: IRLD - news) sells 15-year debt at 2.2 pct vs 1.6 pct in Feb

* Dublin sold 30-year money at lower yield three months ago

* Ireland almost fully funded through to end-2016 (Adds details, analyst quote)

DUBLIN, June 11 (Reuters) - The cost to Ireland of selling debt rose for the first time since it resumed bond auctions last year as it sold 750 million euros of 15-year debt at a yield of 2.2 percent compared to 1.6 percent four months ago.

Ireland is already fully funded for the rest of the year and has raised 11 billion euros out of a guided range of 12 to 15 billion euros of debt to fund the state for 2016, limiting its exposure to jittery markets.

However, it was able to sell 30-year debt at a record low yield of 1.3 percent just three months ago before yields across the euro zone rose. A broad market sell-off began in April when fears of a prolonged period of deflation receded.

Spain also auctioned 5.8 billion euros of debt at higher yields on Thursday as a raft of debt sales in Rome, Dublin and Madrid stretched investor demand.

Ireland's auction received 2.9 times more bids than the value on offer compared, the National Treasury Management Agency (NTMA) said, with demand slightly higher than the 2.65 bid-to-cover ratio across the 3 previous bond sales.

Yields at Irish debt sales are still well below those seen when the NTMA began raising debt periodically in 2012, two years after it was cut off from bond markets. Ireland had to offer an interest rate of 1.8 percent to sell three-month money in July, 2012.

The economy has rebound from the crisis that forced it into a three-year aid programme in 2010 to grow faster than any other in the European Union last year and Standard & Poor's raised Ireland's credit rating by one notch to 'A+' on Friday.

"We were pleased with the level of demand despite recent market volatility. While the yield is higher than our last 15-year bond auction, our borrowing costs remain low by historical norms," NTMA Director of Funding Frank O'Connor said. (Reporting by Padraic Halpin and Conor Humphries; Editing by Kevin Liffey)