Its difficult sometimes to understand what all the talk is about bonds and bills.

Heres a 2 minute guide to whats happening at the moment in my eyes..

Ireland is looking at selling bills to the markets…

Bills are basically a promise to buy back money borrowed…

The buyer makes money by having to pay back less so bills are discounted…

We are looking at raising €500 million this week so whoever lends it will only lend €490 million to get back the  €500 million.

 

Bills last less than a year – the ones in the news today are 3 month bills – they have to be repaid in that term.

Bonds are similar but can last much longer – usually up to 10 years so the rate on them would be much higher.

Ireland has not gone into the bond markets since 2010 so this is good news as someone out there will beging to think we can repay the debt !