€5 billion bond issue for Ireland

Published: 6 January 2011 y., Thursday

The European Commission today placed a €5 billion bond issue on behalf of the European Union under the European Financial Stability Mechanism (EFSM) to finance the first tranche of the EU/IMF financial support agreed for Ireland last December.

The issuance spread was fixed at mid-swap plus 12 basis points, at the tight end of the initial price guidance.

The resulting interest rate of the loan to Ireland will be 5.51% composed of the cost of borrowing for the EU at 2.59% plus a margin of 2.925% as decided by the Council on 7 December 2010. This margin goes back to the EU Budget and is distributed to the EU 27 MS at the end of each financial year. The Commission does not charge any fees or keep any margin for its own use.

The funds will be disbursed to Ireland on 12 January (five business days settlement).

The investor's interest was very strong, and within less than one hour the book was oversubscribed by more than 3 times. Investor demand came from around the world and from all types of investors.

This is a sign of confidence in the euro area and a recognition of the EU as a prime issuer.

The EU borrows in euro for on-lending in euro to sovereigns only on a back to back basis.


The EU rated Aaaa/AAA/AAA by Moody's, S&P and Fitch

Under the EFSM the EU can borrow up to €60 bn to on-lend to any EU Member State, whereas under the Balance of Payments (“BoP”) facility, support is available only to Member States which have not yet adopted the EUR.

In the context of the EFSM and based on the existing financial support programme to Ireland, the EU's funding program in 2011 could reach up to €17.6 bn raised through benchmark transactions. There will also be up to €1.5 bn under the BoP facility to finance commitments to Romania.

Šaltinis: europa.eu
Copying, publishing, announcing any information from the News.lt portal without written permission of News.lt editorial office is prohibited.

Facebook Comments

New comment




Associated articles

The most popular articles

Related videos


Padėkime augti

Deadly rush-hour blast hits subway in Belarus

A blast at a metro station in the Belarussian capital of Minsk has killed at least 11 people and injured dozens more. more »

Thousands join Tokyo anti-nuke march

Around five thousand people march through the streets of Tokyo in anti-nuclear protests. more »

Migration crisis in Lampedusa under the spotlight

The need for a stronger EU response to the migrant inflow crisis on the Italian island of Lampedusa is expected to be among the subjects discussed with the European Commission on Monday afternoon. more »

Arab warplanes join Libya mission

Qatar is the first Arab nation to send fighter jets to help enforce the UN no fly zone over Libya, while other coalition countries also contribute aircraft. more »

Radiation checks on Japanese food imports

Countries reliant on Japanese food imports are checking for possible radiation contamination resulting from Japan's nuclear crisis. more »

Soyuz spacecraft returns to earth

One American astronaut and two Russian cosmonauts return safely to earth after several months aboard the International Space Station. more »

Japanese fishing town „totally devastated“

Up to 9,000 people are feared dead in the Japanese fishing hamlet of Otsuchi, where a Red Cross spokesman says residents could not evacuate in time. more »

Inclusion of aviation in the EU ETS: Commission publishes historical emissions data on which allocations will be based

The European Commission has, today, taken an important step in preparing for the full inclusion of aviation in the EU's emissions trading system (EU ETS) from 1 January next year. more »

Noose tightens on Gaddafi

Pressure mounts on Tripoli as more cities are now under rebel control. more »

Search for quake survivors goes on

Rescue efforts continue six days after a devastating earthquake hit Christchurch. more »