A new 5 billion euro ten-year bond arrived in the Old Continent this morning. It was launched, as announced last Friday, by the European financial stability facility, the rescue fund set up by the EU to help countries in crisis. The issue should guarantee a yield of around 17 basis points on the midswap rate, in line with yesterday's whisper of 16-18 bps. The deal, which was rated triple-A by all three rating agencies, was led by Barclays Capital, Deutsche Bank and HSBC. The new bond is the first to support the assistance program for Portugal.
Two more bonds are planned for the second half of the year, with a target of 3-5 billion for each operation. The first, again in support of the Portuguese, is expected by 15 July. It will amount to 3 billion euros and will have a five-year duration. The EU could then complete the coverage of its financing needs with smaller issues, both through syndicated loans and through targeted transactions. The EFSF placed the first tranche of aid last January, issuing a 5-billion five-year bond to give financial support to Ireland. On that occasion the requests, coming from 500 investors, amounted to over 45 billion euros.
