DUBLIN (AP) — Ireland sold 1.5 billion euros ($2 billion) in government bonds yesterday in a closely watched test of whether international investors would keep buying Irish treasuries despite the country's runaway deficit.

Analysts said the auction was a success, noting it attracted bids 5.1 times the amount on offer.

Together with solid bond auctions in Spain and Greece, the sale offered markets some reassurance for the moment. But analysts cautioned that Ireland had to pay higher interest rates compared to previous borrowing — reflecting investors' fear of an eventual Irish default over the longer term.

The National Treasury Management Agency said its offering of 1 billion euros in 8-year bonds will pay a yield of 6.02 percent, whereas a similar sale three months ago required a yield of just 5.09 percent. Its sale of 500 million euros in 4-year bonds will pay 4.77 percent, compared to just 3.6 percent in a similar sale last month.

Nonetheless, yesterday's auction offered some immediate relief for Ireland. Yields on existing Irish ten-year bonds had reached record highs Monday of 6.56 percent and more than four points above the yields of benchmark German bonds, signs of increasing market skepticism about the country's ability to pay its debt load of 88 billion euros.

Those numbers fell Tuesday to below 6.3 percent and 3.7 points respectively.

Citigroup's chief economist, Willem Buiter, said the premium being demanded on Irish bonds remains "ridiculous," given Ireland's commitment to budget-cutting and its strong cash reserves. He said Irish treasuries should be trading within a percentage point of German rates if what he called irrational market fears could be eased.

Interest rates on Irish bonds have surged in recent weeks amid growing doubts about Ireland's ability to pay its bills.

The biggest source of concern is the as-yet-unconfirmed cost of absorbing dud property loans at nationalised Anglo Irish Bank. The government has already sunk nearly 23 billion euros into the bankrupt lender, but outside analysts estimate the total bill could exceed 35 billion euros — one-fifth of Irish GDP.