High demand for first euro bailout bonds

High demand for first euro bailout bonds

September 4, 2021 qwmzqibw 0

first_img Share Show Comments ▼ Tags: NULL AN auction of the first region-wide Eurozone bonds was concluded within the hour yesterday, as the European Commission found itself inundated with demand for the five-year notes. It sold the targeted amount of €5bn (£4.3bn), with the proceeds going to prop up the European Financial Stabilisation Mechanism (ESFM), the bailout fund that is part-funding Ireland’s rescue to the tune of €22.5bn.The bonds were sold with a 2.5 per cent yield, compared to 1.8 per cent for equivalent German debt. Investors snapped up the new notes, which are perceived to be high-quality paper backed by Europe’s most stable economies but offered at a premium to reflect high yields in peripheral Eurozone nations such as Portugal and Greece. The plan to issue region-wide bonds was announced last year in an attempt to slow the heady rise of bond yields across countries after Ireland was forced to apply for a bailout in November.But the idea of introducing a more permanent region-wide eurobond, or “e-bond”, has proved controversial, with German chancellor Angela Merkel strongly opposing the idea. Analysts at BNP Paribas said: “We believe that an e-bond is the right thing to do if linked with fiscal harmonisation within the EU.” But they admitted that it “could be interpreted as a permanent subsidy for peripheral countries”. A series of region-wide Eurozone bond auctions is expected this year.FAST FACTS | E-BONDSEurope last year announced plans to issue €34bn in region-wide bonds this year in order to fund the Eurozone’s bailout funds.Analysts expect a yield premium of one to two per cent over European Union debt. Read This Next’A Quiet Place Part II’ Sets Pandemic Record in Debut WeekendFamily ProofHiking Gadgets: Amazon Deals Perfect For Your Next AdventureFamily ProofYoga for Beginners: 3 Different Types of Yoga You Should TryFamily ProofIndian Spiced Vegetable Nuggets: Recipes Worth CookingFamily ProofAmazon roars for MGM’s lion, paying $8.45 billion for studio behind JamesFamily ProofThe Truth About Bottled Water – Get the Facts on Drinking Bottled WaterGayotBack on the Rails for Summer New York to New Orleans, Savannah and MiamiFamily ProofChicken Bao: Delicious Recipes Worth CookingFamily ProofCheese Crostini: Delicious Recipes Worth CookingFamily Proof High demand for first euro bailout bonds whatsapp KCS-content Wednesday 5 January 2011 8:28 pm whatsapplast_img

 

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