Irish borrowing costs fell to a record low of 2.39 per cent on Monday following Standard & Poor’s raised Ireland’s debt rating on Friday.

Spanish yields down by a similar amount to an all-time low 2.59 percent while Italian equivalents were 4 bps lower at 2.71 percent.

“Clearly Ireland’s ratings upgrade adds to the increasingly better news for the periphery in general, but ratings agencies tend to lag what the market is doing,” said Orlando Green, a strategist at Credit Agricole. “But broadly this is certainly about the market looking at the ECB and what they have done and what they will do in the future so investors are grabbing yields while they can.”

Standard & Poor’s became the first major rating agency to restore an A rating to Irish sovereign debt since the country’s return to the international bond markets.

In a significant boost to the Government, the agency raised Ireland’s credit rating by one notch to A- from BBB+, with a positive outlook.

It cited an improved outlook for growth and more signs of recovery in the domestic economy as the rationale for its upgrade.

As part of the upgrade, S&P also raised its 2014-2016 average real GDP growth projections for Irish economy to 2.7 per cent from 2 per cent.

Yields on Irish benchmark 10-year bonds fell to a low of 2.43 per cent on Friday after the upgrade was announced, keeping Irish borrowing costs below that of the US for first time since 2007.

Added reporting: Reuters