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Ireland has issued its first inflation-linked bond, raising €609.5m with a coupon of 0.25 per cent.

The 23-year bond was issued as a private placement with repayment of the principal linked to Ireland’s consumer price inflation measure.

Frank O’Connor, director of funding and debt management at Ireland’s National Treasury Management Agency, said the move would “allow Ireland to source funding from a broader spectrum of investors”.

Inflation-linked debt partially protects bondholders from rising consumer prices which erodes into the value of their fixed returns.

Unlike most of its European counterparts, Ireland’s economy has not seen a surge in inflation this year, with price growth remaining subdued at 0.6 per cent last month. The eurozone average is 1.5 per cent while UK inflation is above the Bank of England’s target at 2.3 per cent.

Ireland’s debt agency created the bond in response to inquiries from Irish investors with inflation-linked liabilities, said Mr O’Connor.

The bond is Ireland’s first private placement in a year, since it issued a 100-year bond in April 2016.

The move underlines Ireland’s success in returning to the capital markets since its financial crisis hit in 2010.

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