.jpg)
The first bond to be issued by the European Financial Stability Facility (EFSF) will be admitted to trading on the Luxembourg Stock Exchange on 1 February 2011.
This bond issue, which is guaranteed by fourteen EU Member States, is for an amount of EUR 5 billion and a term of 5 years with a final maturity on 18 July 2016. It will pay an annual coupon of 2.75% and will be issued at 99.302%. The majority of the proceeds of the issue will be used for the EU/IMF financial stability package for Ireland.
This inaugural bond is the first tranche of a programme issue, the “Guaranteed Debt Issuance Programme”, which has been assigned a triple A rating by the three major credit rating agencies. Initial interest in this issue was particularly strong and the order book contained some 500 investors worldwide, particularly in Asia, for an amount of EUR 44.5 billion.
The European Financial Stability Facility was created in June 2010 with a mandate to raise funds in the capital markets and to make loans to Euro Area Member States in need. Its shareholders are the sixteen Euro Area Member States. It is able to issue bonds guaranteed by the Euro Area Member States for up to EUR 440 billion.
The Luxembourg Stock Exchange has much experience in the listing of securities for states and supranational agencies, listing issues from seventy-six states and eleven supranationals.
