Global General

EU to issue bonds to raise money for Ireland

(Agencies)
Updated: 2010-12-22 11:02

BRUSSELS - The European Union (EU) and the European Financial Stability Facility (EFSF) will begin to issue bonds in January to provide financial aid to Ireland, the European Commission said on Tuesday.

The EU intends to launch the first bond at the beginning of January under the European Financial Stability Mechanism (EFSM) and the EFSF is expected to follow with its first bond issue towards the end of January, the European Commission said in a statement.

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"The EU and the EFSF will however carefully analyze the markets after they reopen in the New Year and may adapt funding plans accordingly," the statement said.

Issues for both the EU and EFSF will be mainly in standard benchmark maturities of five, seven and ten years, while those of the EU will be denominated only in euros, and those of the EFSF can adapt to market developments.

The bonds issued by the EU and the EFSF are rated triple A by the three major rating agencies, Fitch, Moody's and Standard & Poor's.

In the first quarter of 2011, the EU and the EFSF will disburse 11.7 billion to Ireland in total.

Under the 85-billion-euro (about $111 billion) aid package endorsed by EU finance ministers last month to Dublin, Ireland will contribute 17.5 billion euros to help itself, the EU will raise 40.2 billion euros through EFSM and EFSF, the International Monetary Fund (IMF) will offer 22.5 billion euros, while Britain, Denmark and Sweden will together provide 4.8 billion euros in the form of  bilateral loans.