LONDON (Dow Jones) – The European financial stabilization facility (EFSF) on Tuesday set at an initial price indication, according to an underwriter, the initial return for its first bond with a maturity of five years at 6 to 8 basis points over mid-swaps.
Midswaps are an important benchmark in the interbank market. The three banks, Citigroup, HSBC and Societe Generale are joint lead managers in this first EFSF emission, with the EUR 5 billion to be included in the capital market to Ireland to help the financial crunch. The EFSF has all three major rating agencies are an "AAA" rating.
As part of the Support Programme for Ireland EFSF plans in the years 2011 and 2012 a total capital raising of up to EUR 26.5 billion. After the acute debt crisis in the spring 2010 the EU had put up with the International Monetary Fund (IMF), the Euro-shield with a total volume of 750 billion EUR. Its core consists of the European Financial Stability Facility (EFSF), which has a circumference of 440 billion EUR and is supported by the euro countries. Added to IMF assistance come in the amount of EUR 250 billion and a credit line of the EU Commission of 60 billion EUR.
DJG / DJN / apo / mle / dok