Debut bond issued by Eurozone's rescue fund sees strong demand

10:25, January 26, 2011      

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The European Financial Stability Facility (EFSF), the rescue fund set up by Eurozone countries last May, Tuesday saw strong demand for its debut bond issued to raise cash for Ireland.

Demand for the five-year bond was reportedly nearly nine times of the 5 billion euros (6.8 billion U.S. dollars) on offer, which is seen as a sign of confidence in the facility.

Klaus Regling, chief executive of the EFSF, said that the strong demand "confirms confidence in the strategy adopted to restore financial stability in the euro area."

The 440-billion-euro (580-billion-U.S. dollar) EFSF is not offered directly by eurozone countries, but guaranteed by them to borrow money by issuing bonds on the market for debt-laden eurozone members.

According to the aid package endorsed by European Union (EU) finance ministers last November to Ireland, the EFSF, will raise 17.7 billion euros in total for Dublin.

Earlier this month, the European Commission also raised 5 billion euros for Ireland through its first bond issuance under the European Financial Stabilization Mechanism (EFSM), which is guaranteed by the EU's budget. Markets snapped up the bond within one hour.

Source: Xinhua

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