BRUSSELS (MNI) – The European Union Wednesday raised E5 billion to
fund financial assistance for Portugal via a 10-year bond, issued under
the European Financial Stabilisation Mechanism.
The deal, which priced at 20 bps over mid-swaps with a coupon of
2.75%, was launched by the European Commission on behalf of the EU.
Rated ‘AAA’, the bond is backed by the EU budget, and attracted E7
billion of demand from 100 accounts and closed within three hours.
Most of the interest came from European banks, investment funds,
central banks, and pension funds, but 12% of the deal went to Asian
accounts, the European Commission said in a statement.
Portugal is due to receive the funds, part of its E78 billion
EU-IMF bailout, on 21 September.
To fund the financial assistance it has pledged to Portugal and
Ireland, the EU, through the Commission and the EFSM, is expected to tap
the markets for a further E5 billion in the coming weeks, in one or two
transactions with maturities between 5 years to 15 years, the commission
confirmed.
The lead managers for the transaction, the second 10-year bond
issued under the EFSM, were Barclays, BNP Paribas, Commerzbank, HSBC
and UBS. Bank of America Merrill Lynch, BBVA, Citibank, Credit Suisse,
DZ Bank, Goldman Sachs, Morgan Stanley and Societe Generale were
co-leads.
–email: pkoh@marketnews.com; Brussels newsroom +32495228374
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