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EU Prices EUR 5 Billion 2015 Bond At Swaps + 12

Submitted by Tyler Durden on 01/05/2011 13:48 -0400

RanSquawk reports that the European Union has priced the marketed EUR 5bln 2015 bond, 2.5% interest, at 99.594 reoffer, swaps +12 BP, according to Leads. As a reminder, this is what Brian Yelvington had to say about this notable issue early today: "The €5B EFSF debt sale scheduled for today was reportedly 3x
oversubscribed with pricing expected to be mid swaps +15bp. The
markets should keenly watch the actual pricing of the deal and its
secondary trading as well as the knock-on impacts on traditional Euro
sovereign issuance. We still believe that a finite capped facility
that effectively crams down traditional issuance will cause further
pressure on spreads. A new EU draft proposal suggests that bondholders
take losses on ailing banks rather than upstreaming the responsibility
to the sovereign level and bailouts being taxpayer funded."

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Wed, 01/05/2011 - 13:50 | 849732 RobotTrader

3x oversubscribed?

You must be kidding.

I guess everyone is still interested in paper vs. things...

Wed, 01/05/2011 - 15:05 | 849977 MarketTruth

Robo = pot 2 kettle.

You mean like paper stocks instead of physical gold or silver? Robo's double-speak and wishy-washiness is just like... an American politician. Are you, by chance Robo, Nancy Pelosi in drag?

Wed, 01/05/2011 - 15:09 | 849986 MarketTruth

Wed, 01/05/2011 - 13:53 | 849740 Tic tock

Because the Euro's just that important

Wed, 01/05/2011 - 14:08 | 849801 Horatio Beanblower

"Brazil has sounded a new note of warning in the international "currency war" by pledging not to allow the United States to "melt the dollar"." - http://www.telegraph.co.uk/finance/currency/8241635/Brazil-pledges-to-stop-US-melting-the-dollar.html

It's a funny old world.

Wed, 01/05/2011 - 14:12 | 849821 CheapKUNGFU

Brazil is the barnacle on the ass of progress... they have no way to stop ANYTHING that the US wants to happen... not now, not EVER

Wed, 01/05/2011 - 14:15 | 849829 Shameful

I know Brazil has a history of nuking their own currencies into oblivion but not even that will stop Zimbabwe Ben's relentless onslaught. Short of them "taking him out" I have no idea how they can stop Bennie from printing, and the printing can easily overwhelm anything Brazil could try to do to strengthen the dollar vs the Real and not have real wages drop to nothing in Brazil.

Wed, 01/05/2011 - 15:01 | 849968 THE DORK OF CORK

Listen, and understand! That Bernank is out there! It can't be bargained with. It can't be reasoned with. It doesn't feel pity, or remorse, or fear. And it absolutely will not stop, ever, until all currencies seek salvation through Dollar hegemony.

The Dollar is meant to die and be resurrected as a non reserve asset backed currency yet The Bernank is without reason.............

www.youtube.com/watch?v=PFrufPxjwX0

Wed, 01/05/2011 - 15:10 | 849999 MarketTruth

Game over man. Game over!

Wed, 01/05/2011 - 14:09 | 849811 RockyRacoon

Note: Santelli just gave a shout-out to ZH for its mention of SHIBOR.

Ahead of the curve here, folks.

Wed, 01/05/2011 - 14:10 | 849814 Cdad

Indeed....kudos Tyler. Keep it coming.

Cdad

Wed, 01/05/2011 - 14:42 | 849914 Horatio Beanblower

Santelli did a decent interview on the Peter Schiff show a few nights ago - http://schiffradio.com/pg/jsp/charts/audioMaster.jsp;jsessionid=556D2C26F8158A94468147BD2EBDDDD9?dispid=301&pid=51291&f=NTEyOTEtdHJ1ZS0wMS8wNS8yMDEx

Enjoy!

Wed, 01/05/2011 - 14:10 | 849815 CheapKUNGFU

Well we know Santelli reads this site. He just quoted SHIBOR articles posted here in the past...

MUAHAHAHAHH

Wed, 01/05/2011 - 14:22 | 849859 malek

I am confused. Is that the first issue of a EU Euro-Bond, not related to one distinct country?

I thought Germany was still fighting against such.

Wed, 01/05/2011 - 14:41 | 849907 Dick Darlington

This additional layer of ponzi is issued under the "EFSM" and is backed by all EU members (EU budget). The pile of fiat collected in this layer will be handed to Ireland (bankers want their bonuses this time a year, ya know). Soon there will be more issuance under "EFSF" which is the monster vehicle with a guarantee by participating eurozone member states on a pro rata basis. (greece and ireland naturally are not participating member states anymore and soon the non-participating bunch will grow as Portugal joins them)

Wed, 01/05/2011 - 14:48 | 849928 DonutBoy

I think they made it intentionally confusing. This is an EFSF bond, funding the "long-term structural facility" for bail-outs. It is not a sovereign issuing their own debt through EU bonds, as many of the EMU would like and Germany is fighting.

I think the issue will reach a head later this week with the Spanish 5 and 10 year bond auctions. Given the exorbidant rate that Portugal paid for a 6-month bill today, I would imagine the ECB is preparing to step in massively on the Spanish bonds. If so, that's the pattern for 2011. It won't be looked on kindly by the German voters.

Wed, 01/05/2011 - 15:23 | 850024 Dick Darlington

This is not EFSF issuance. This particular one was issued under EFSM and the proceeds will be handed to Ireland. Ireland will pay 5,51% of interest to EU for the money.

Thu, 01/06/2011 - 01:30 | 851693 DonutBoy

I stand corrected - it is European Financial Stabilization Mechanism (EFSM).

http://www.bloomberg.com/news/2011-01-05/eu-to-pay-2-59-interest-on-init...

Wed, 01/05/2011 - 14:42 | 849908 M.B. Drapier

A new EU draft proposal suggests that bondholders take losses on ailing banks rather than upstreaming the responsibility to the sovereign level and bailouts being taxpayer funded.

Anyone happen to know which one?

Wed, 01/05/2011 - 14:47 | 849924 THE DORK OF CORK

Do you care to shed any light about what the hell happened on the 21rst of December or are you still trying to get your head around it ?

EU Prices EUR 5 Billion 2015 Bond At Swaps + 12

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