The European Financial Stability Facility announced an expanded funding profile Wednesday, with plans to start selling short-term paper with three-, six- and 12-month maturities.
With a first auction of the bills expected to occur before the end of 2011, EFSF CEO Klaus Regling said “the launch of a short-term funding programmed is in line with the enlarged scope of activity of EFSF to use its new instruments efficiently.”
The €440 billion EFSF is not forsaking its long-term funding platform, but augmenting it with shorter-term paper in a move to “add flexibility,” Regling said.
Bill auctions will be carried out through the 47 international banks that make up the EFSF Market Group, which is primarily composed of U.S. (Goldman Sachs Group, JPMorgan, Bank of America, etc.) and European (Deutsche Bank, BNP Paribas, Societe Generale, etc.) institutions.
“By introducing this programme, we will now provide our investors with the opportunity of investing across the full yield curve,” EFSF deputy CEO and CFO Christophe Frankel said.
Previously, in the placement of bonds to fund payments to Ireland and Portugal, the EFSF sold five- and 10-year maturities.
Wednesday’s announcement comes as European leaders are gathering for a summit that will focus on the sovereign debt issues that are threatening to send the euro zone into a deep recession.
The European Central Bank gathers Thursday, with questions brewing over whether it could cut rates again in Mario Draghi’s second meeting at the helm, while EU policymakers will meet Thursday and Friday in Brussels.
The gathering comes on the heels of a fresh reminder of what is at stake, after Standard & Poor’s placed the ratings of 15 euro zone countries on review for downgrade, including the AAA ratings of Germany, France and the EFSF itself, which depends on the ratings of the nations that backstop its bailout efforts. (See “EFSF Won’t Escape S&P’s Review Of European Credits.”)
U.S. Treasury Secretary Timothy Geithner, who has been meeting with his French and German counterparts this week, said he is confident the efforts to forge a tighter fiscal union and stronger spending discipline in countries like Italy and Greece will ultimately succeed.
forbes.com
With a first auction of the bills expected to occur before the end of 2011, EFSF CEO Klaus Regling said “the launch of a short-term funding programmed is in line with the enlarged scope of activity of EFSF to use its new instruments efficiently.”
The €440 billion EFSF is not forsaking its long-term funding platform, but augmenting it with shorter-term paper in a move to “add flexibility,” Regling said.
Bill auctions will be carried out through the 47 international banks that make up the EFSF Market Group, which is primarily composed of U.S. (Goldman Sachs Group, JPMorgan, Bank of America, etc.) and European (Deutsche Bank, BNP Paribas, Societe Generale, etc.) institutions.
“By introducing this programme, we will now provide our investors with the opportunity of investing across the full yield curve,” EFSF deputy CEO and CFO Christophe Frankel said.
Previously, in the placement of bonds to fund payments to Ireland and Portugal, the EFSF sold five- and 10-year maturities.
Wednesday’s announcement comes as European leaders are gathering for a summit that will focus on the sovereign debt issues that are threatening to send the euro zone into a deep recession.
The European Central Bank gathers Thursday, with questions brewing over whether it could cut rates again in Mario Draghi’s second meeting at the helm, while EU policymakers will meet Thursday and Friday in Brussels.
The gathering comes on the heels of a fresh reminder of what is at stake, after Standard & Poor’s placed the ratings of 15 euro zone countries on review for downgrade, including the AAA ratings of Germany, France and the EFSF itself, which depends on the ratings of the nations that backstop its bailout efforts. (See “EFSF Won’t Escape S&P’s Review Of European Credits.”)
U.S. Treasury Secretary Timothy Geithner, who has been meeting with his French and German counterparts this week, said he is confident the efforts to forge a tighter fiscal union and stronger spending discipline in countries like Italy and Greece will ultimately succeed.
forbes.com
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