First EFSF bond issue on Tuesday

(FRANKFURT) - The first EU bond auction to raise funds for Ireland will be launched Tuesday, the German Finance Agency said Monday, and is expected to attract up to five billion euros ($6.8 billion dollars).

The five-year issue "will be closed Tuesday before 16:00 (1500 GMT)," when the agency has organised a press conference in Frankfurt with Klaus Regling, head of the European Financial Stability Facility (EFSF), a spokesman told AFP.

Regling will announce the results of a bond auction estimated at between three and five billion euros, with the proceeds used to help finance the 85-billion-euro rescue package agreed last year for heavily-indebted Ireland.

An EFSF spokesman confirmed the range on Monday and said the bonds would have a maturity of five years.

Ireland secured 67.5 billion euros of international funding before Christmas, topped up by 17.5 billion euros the government in Dublin contributed by raiding its public pension fund.

The EFSF has mandated three banks -- Citi, HSBC and Societe Generale -- to manage the landmark operation.

It benefits from a top AAA rating from the three main international ratings agencies, Fitch, Moody's and Standard and Poor's, and is backed by guarantees from eurozone governments.

The EFSF can borrow up to 250 billion euros on behalf of indebted eurozone countries, retaining the remainder of its 440 billion euros in funds as collateral for the bonds it issues.