EU bailout fund places 5-year bonds at lower rates
(FRANKFURT) - The eurozone's temporary financial rescue fund, the EFSF, said on Tuesday that it had raised 960 million euros ($1.2 billion) in a five-year bond issue which drew substantial demand.
The European Financial Stability Facility said it had received total bids for 2.621 billion euros' worth of bonds, 2.7 times the amount issued, and that it would pay an average of 1.83 percent in interest.
In late March, the EFSF issued five-year bonds worth four billion euros for which it paid an average interest rate, or yield, of 2.061 percent.
The facility is able to borrow money on sovereign debt markets at cheap rates owing to backing from European countries like Germany, and can pass on the funds on to countries which find it harder to obtain favourable rates.
Three countries are currently in that situation; Greece, Ireland and Portugal.
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