Today the European Union (EU), with the help of the European Commission and the European Financial Stability Mechanism (EFSM), has successfully placed 3,000 million euros in bonds to 30 years at an interest rate of 3.75 %.
Ireland and Portugal will receive 1,500 million euros each as part of the bailout agreement with the EU, which gives first bonds in a term of 30 years, says the European Commission.
The issuance of 30-year term extends the average maturity of loans granted by the EU to Ireland and Portugal and so it improves debt sustainability and long-term financial forecasts of both countries.
The issue has acquired an interest 125 basis points above the “mid-swap” which is the benchmark in transactions of this type. The deal was closed within two hours, and with demand came mainly from Europe, about 5,200 million euros.
Ireland and Portugal will receive the funds on 16 January. The bonds expire on April 4, 2042 and offer a yield of 3.75%. The EU intends to issue more bonds for 12,500 million euros during the year to fund the bailouts of Ireland and Portugal.