Ireland's National Treasury Management Agency (NTMA) said on Wednesday it was seeking to raise 3 billion euros ($4.09 billion) in a five-year benchmark bond and planned a further foray later this year.
"We are quite confident we will be able to do a 3 billion deal," the NTMA's director of funding and debt management, Oliver Whelan, told Reuters in an interview.
"It's pretty early but there is a good spread of investors from right across Europe," Whelan said after order books opened on Wednesday.
Investors included central banks and asset managers, he said.
Price guidance has been set at mid-swaps plus 90 basis points area, Whelan said, adding that the book was expected to close on Thursday.
"The idea is we'll leave it open to see how much interest there may be from Asia overnight," he said.
A glut of euro zone sovereign borrowing is expected this year as governments seek to raise funds to pay for their recession-fighting fiscal stimulus packages.
Germany was first out the block on Wednesday, shifting only two thirds of the 6 billion of 10-year paper it put up for auction, an outcome that triggered a steep fall in Bund prices and a corresponding jump in long-term yields.
Austria's debt agency said on Wednesday it was selling a 3 billion euro syndicated 5-year bond and would price the deal on Thursday. It set a guidance of 10-15 basis points over mid-swaps for the deal, adding that it was already oversubscribed.
"With the benefit of hindsight, I am sure that both Austria and Ireland, which opened their books before the German Bund auction results were released, might have waited a couple of more days before starting the syndication process," said David Schnautz, bond analyst with Commerzbank in Frankfurt.
"I am bewildered that Austria and Ireland are now competing in the five-year area of the yield curve like this. It may explain why they are both declaring hopes to raise 3 billion euros. It is an old tactic in the hope that the deals receive a quality oversubscription and raise more than that. But we will see if they do," Schnautz said.
WORSENING PUBLIC FINANCES
Official data this week showed Ireland's budget deficit soared to 12.714 billion euros last year versus 1.619 billion in red in 2007 as a deepening recession battered the former "Celtic Tiger's" public finances.
Hit by worsening public finances, the government last month raised its 2009 budget deficit forecast to 7.25 percent of gross domestic product, more than double the EU limit, after projecting it would reach 6.5 percent in its October budget.
The government said in December it would inject 5.5 billion euros into the country's three biggest lenders and move to take majority ownership of the weakest one.
The NTMA said last week it may need to raise 20 billion euros this year to cover the government's 2009 borrowing requirements together with a maturing bond, up from 18.4 billion euros projected in October.
The NTMA, the asset and liability management arm of the Irish government, plans to raise the funds through a series of bond auctions and syndicated bonds.
Whelan said the NTMA was likely to hold bond auctions in the coming months and planned a further syndicated benchmark bond of around 3 billion euros later this year depending on conditions.
"We would not really have a timing for that yet," he said.
Whelan said the maturity would be subject to the market, adding that there was currently good appetite for 5-year issues.
"If it was somewhere else like 10-year (maturities), then obviously we would avail of that as well," he said.
Ireland is rated triple-A by all three major ratings agencies.