EU raises 4.75 billion euros for Ireland, Portugal
The European Commission said it raised three billion euros for Ireland and 1.75 billion euros for Portugal on Tuesday in a bond issue for the bailed-out nations that attracted strong demand.
The 10-year bond was oversubscribed threefold, attracting investors from across Europe as well as Asia, with deals closing within an hour and half of the start of the sale, the commission said.
The funds, totalling 4.75 billion euros ($6.7 billion), will be disbursed to the two eurozone nations on May 31.
The 27-nation EU and the 17 eurozone bloc said last week that they would raise 15.3 billion euros for Portugal and Ireland by July 15 with a series of bond issues through their two financial rescue mechanisms.
The European Commission is raising funds on behalf of EU states, who are backing one-third of the 67.5 billion euro Irish bailout, which was agreed in December, and a 78 billion euro Portuguese rescue approved this month.
The IMF and eurozone states, which created the European Financial Stability Facility to prop up economies in trouble after a huge bailout for Greece last year, are providing the remaining funds.
The commission said the sale “confirms the acceptance of the European Union as a benchmark issuer and the continuous confidence of the market in the stability and assistance measures set up by the EU together with the EFSF and the IMF.”
One quarter of investor demand for Tuesday’s bond, which pays a coupon of 3.5 percent, came from Asia, while 22 percent were from France, 15 percent from Germany and 15 percent from Britain.
The investor type included asset managers (27 percent), central banks (23 percent), pension and insurance investors (23 percent) and private banks (20 percent).
“This compares very favourably with bonds of similar issuers. Investor interest was again very strong. Books were closed within one and a half hour, being oversubscribed three times,” the commission added.