Moody's ruins EFSF plans. After the downgrading of Franca by the American agency, the bailout fund has officially decided to postpone the launch of a new three-year bond. This was reported by Thomson Reuters' Ifr service.
JP Morgan, Morgan Stanley and Natixis were hired yesterday afternoon to manage the issue and immediately began sounding out potential investors. An initial yield indication for the bond was given at 0/2 basis points below the midswap rate.
One of the bankers involved explained that the postponement is due to complications related to guarantees, "because a certain percentage of guarantors must have the same rating as the EFSF". Moody's confirmed the triple A rating for the Fund, but Paris was deprived of the top grade during the night.
The downgrade therefore created a problematic asymmetry, because France is the second largest guarantor of the EFSF, with a 21,83% stake. Its share is lower only than that of Germany, which controls 29,07%.
