The Bank of Ireland (BOI) has sold subordinated bonds worth €200 million yesterday and this was the first time that any bank in Ireland has issued subordinated bonds since the global financial crisis began in 2008 and resulted in an economic slowdown.

Subordinated bonds are more risky than other bonds and several investors had suffered losses when Irish banks crashed during the financial crisis. The Subordinated bonds of the BOI will yield 10 per cent every year during the coming decade to the investors.

The BOI said that eh response from investors was very positive and that the issue was oversubscribed three to four times than amount of sale. Analysts said that the high interest rates being offered on the bonds indicate that the recovery of the Irish economy is still fragile. They say that the latest issue was significant because it was not backed by government guarantees or mortgage books.

Bank of Ireland had earlier successfully raised €1 billion through covered bond, which was its first public bonds sale in two years. The move was aimed at raising money to fix the economy independently without looking for external aid. The bank had raised €1.1 billion from the private sale of bonds secured on its UK residential mortgage book.