(Adds expansion of fund’s powers in first paragraph.)
Oct. 31 (Bloomberg) -- The European Union’s rescue fund is seeking 3 billion euros ($4.2 billion) from its first bond sale since policymakers expanded its powers to stop the euro-region’s sovereign debt crisis from spreading.
The European Financial Stability Facility’s new securities will help finance Ireland’s bailout, the Luxembourg-based fund said in a statement. The bonds have a so-called long 10-year maturity, meaning they come due between 10 and 11 years, the EFSF said.
The EFSF had its AAA rating affirmed by Moody’s Investors Service last week after EU leaders backed leveraging up the 440 billion-euro facility to defend countries such as Italy, which has debt of more than three times the fund. The EFSF is overseen by euro-area states while the European Financial Stabilisation Mechanism is run by the EU’s 27-nation executive arm.
“As a relatively new issuer, we need to continue building long-term demand,” Christophe Frankel, deputy chief executive officer of the EFSF, said in the statement.
The deal will be the EFSF’s first bonds since June 22, when it raised 3 billion euros from 2.75 percent notes due in 2016, according to data compiled by Bloomberg.
Policy makers are seeking to boost the capacity of the EFSF to 1 trillion euros to help fight the crisis that has already led to the bailouts of Greece, Ireland and Portugal. The fund was established last year to sell bonds to finance loans for distressed euro-area nations.
The fund hired Barclays Capital, Credit Agricole CIB, JPMorgan Chase & Co. to manage its new deal, the EFSF said.
--Editors: Andrew Reierson, Michael Shanahan
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