Euro rescue fund raises 3billion euro

9 Nov

The European Financial Stability Facility have raised 3billion euros in a bond sale on Monday, despite fears from many investors who have showed hostility towards eurozone bonds.

The sale was expected to go ahead last week, but it had to be postponed due to turmoil in the markets, and the EFSF expected to hold the sale in the ‘near future’. This week finance ministers were seen speeding up the process. However, The Financial Times suggest the volatile markets are drawing bankers away.

Yet EFSF head Klaus Regling was eager to assert: “I am pleased that the EFSF has attracted investors from all over the world with a satisfactory overall amount despite a difficult market environment”.

The EFSF named the three banks who will be joint managers for the 10-year deal; Barclays Capital, Credit Agricole and JP Morgan.

The Financial Times reports how one banker sees the EFSF bond sale favorably, “The EFSF wanted to show that it can price in any market and for that reason I would say this is a successful deal”.

The ten-year bond has been priced at 177 basis points – over triple the interest of the deal issued in June, and standing as the highest rate so far. Yet some bankers have said the two cannot be compared, as the situation has changed making it difficult for borrowers, including the EFSF.

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