Eurozone rescue fund plans debut bond issue

City A.M. Reporter
THE European Financial Stability Fund (EFSF), the eurozone's sovereign bailout fund, has appointed the lead managers for its first bond sale, expected next week.

Citibank, HSBC and Societe Generale will lead manage the transaction, expected to be a five-year bond sized at between €3-5bn (£2.5-4.2bn).

The benchmark issue is part of the financial assistance programme for Ireland, the EFSF said in a statement.

"Over 2011 and 2012 EFSF will raise up to €26.5bn in the capital markets as part of the Irish support programme, which will include two further benchmark bonds of €3-5bn per transaction in the current year," it said.

EFSF is rated triple A by the three major rating agencies, Fitch, Moody's and Standard & Poor's.

"The first EFSF issue is an important transaction for markets and for the euro zone," the fund's CEO Klaus Regling said in the statement.

"I am confident that the strong position of these highly regarded global institutions in the market will ensure the success of our first issue, helping to restore stability to the sovereign bond markets and protect the euro."

Based in Luxembourg, the EFSF was introduced last year by the European Union to provide a financial safety net for euro zone countries in economic strife.

Eurozone finance ministers are discussing an increase to the fund's effective lending capacity, though France has said it would be March before a firm plan was in place.