Investors embrace big eurozone bond sales Sovereign bond issuance from the eurozone periphery is on track for the best quarter since the continent's crisis erupted, as investors have shrugged off simmering concerns over the currency bloc and embraced a series of big bond sales. Governments on the eurozone's stricken rim have sold €28.2bn worth of bonds so far this year, according to Dealogic, almost double the amount over the same period last year and making it the best start to a year since the first three months of 2010. The European Central Bank's promise last year to intervene in the bond markets of struggling members that enter a bailout programme assuaged fears over the currency union's durability and triggered a strong rally across the continent's financial markets. Tumbling bond yields have depressed the borrowing costs of Italy and Spain, and helped Ireland and Portugal - two countries already in rescue programmes - return to markets with aplomb. "Investors are searching for yield, and coupled with some more stability in Europe, it has been a great environment for periphery sovereign issuance," said Jamie Stirling, co-head of sovereign debt markets at BNP Paribas. Ireland has raised €7.5bn already this year through bond sales in January and March, and now enjoys the lowest borrowing costs in seven years. Portugal in February issued new debt for the first time since its May 2011 bailout, raising €2.5bn in a deal that attracted more than €12bn of orders. "We intend to continue this process of returning to markets this year, and will be seizing market opportunities," Maria Luis Albuquerque, Portugal's secretary of state for the treasury, told the Financial Times Investors and bankers have been surprised by the resilience shown by the eurozone's periphery to an inconclusive election in Italy - where politicians have struggled to form a government - and most recently turmoil in Cyprus. Fund managers say moves to tax smaller Cypriot depositors to help pay for the country's bailout sets an unwelcome precedent, and fret that the overall rescue could collapse - potentially pushing Cyprus out of the eurozone. But for now the ECB's backstop has trumped those concerns. "Europe was like a dying patient but the ECB has administered a defibrillator, and the patient is now alive," said Ewen Cameron Watt, chief investment strategist at the BlackRock Investment Institute. He's not well, but he is alive. The improvement in sentiment is so marked that some bankers have even begun to hold tentative discussions with Greece about the impoverished country returning to bond markets at some point. "We've started to talk to the Greeks in recent months, but that's probably more of a 2014 story," said one banker who has held talks with Athens" debt management agency. But there's strong support for anything that offers spread these days. The European periphery's companies and banks have also benefited from the buoyant bond markets, and have sold €31.9bn worth of bonds so far this year, already making it the best quarter since early 2011. "The search for yield is pushing down borrowing costs generally," Mr Cameron Watt said. Maybe we'll see a pause now, but it's been a strong quarter for chasing yield.