TREASURIES-Bond prices rise as Ireland bailout disappoints

* Treasuries get bid as Irish bailout details disappoint

* Ireland, Portugal CDS spreads widen after plan

By Karen Brettell
(Updates market action, adds new quotes, changes byline)

NEW YORK, Nov 29 (BestGrowthStock) – U.S. Treasuries prices rose
on Monday in early New York trade as investors disappointed by
some details of the EU’s planned rescue package for Ireland
sought out safe-haven debt.

Benchmark 10-year Treasury notes (US10YT=RR: ) rose 9/32 in
price to yield 2.84 percent.

The 30-year bond (US30YT=RR: ) increased 7/32 in price to
yield 4.19 percent.

“The total ‘risk on’ trade is still not back, even though
there was this announcement,” said Ira Jersey, interest rate
strategist at Credit Suisse in New York.

“I think part of it was that the Irish, Spanish and
Portuguese market didn’t react the way some people thought they
would, with spreads going wider,” he said. “That kept a little
bit of a bid in Treasuries.”

The EU on Sunday approved an 85 billion euro ($115 billion)
rescue package for debt-stricken Ireland, the second euro
country after Greece to receive emergency aid.

The package includes 35 billion euros to help restructure
the shattered Irish banks. Ireland will contribute 17.5 billion
euros of its own cash and pension reserves towards the bank
rescue. For details, see [ID:nLDE6AR0M6]

Credit default swaps protecting Ireland’s debt rose by
around 9 basis points in cost on Monday to 612 basis points, or
$612,000 per year to insure $10 million in debt for five years,
according to Markit Intraday.

Portugal’s CDS costs also rose by around 36 basis points to
537 basis points and Spain’s CDS costs increased by around 29
basis points to 351 basis points, Markit data show.

Some investors were disappointed by details of the plan,
including the contribution that Ireland’s pension fund will
make to the bailout.

“Countries that use long term committed assets to solve
short term budgetary and liquidity problems quite rightly draw
investor skepticism, and the fact that it is the Pension Fund
that is being used to plug a hole is a red flag to the
markets,” Credit Suisse analysts noted in a report sent earlier
on Monday.

“In addition the announcement that senior bondholders may
be required to participate in any losses from 2013 was also not
received well,” they added.

U.S. stock index futures also fell on Monday as worries
lingered about Europe’s ability to contain government fiscal
problems from spreading. [ID:nN29193518]

(Editing by Chizu Nomiyama)

TREASURIES-Bond prices rise as Ireland bailout disappoints