''..The bond is likely to be priced at a higher interest rate than similarly rated debt from Germany and France. The news came as prospects of the European Central Bank increasing its purchases of bonds led to market interest rates falling for the so-called peripheral euro zone countries such as Spain, Italy and Ireland.
Traders said the ECB had further stepped up its buying yesterday. Some bankers and investors fret that the EFSF bond could hurt the ability of other European governments to raise debt.
Elisabeth Afseth, fixed income strategist at Evolution Securities, said: “There is a risk of crowding out as the EFSF bonds may prove more attractive to investors than other debt, including German Bunds.
A banker who held investor roadshows with the facility said: “Investors love this stuff. But if you buy an EFSF bond, why on earth would you buy Spain? The risk is just too great.”..''
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