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Christophe Frankel, EFSF’s Chief Financial Officer & Deputy CEO said: “Launching a one-year bond means that we can react to strong market demand on the short end and provide investors with an alternative to the planned three-year bond".
EFSF’s initial plan to issue a three-year benchmark bond last week was postponed due to last week’s rating action by Moody’s which reduced France’s long-term debt rating from Aaa to Aa1. EFSF’s Deeds of Guarantee require that EFSF’s new issues, at the date of the issue, are covered 100 per cent by guarantees of Member States with a rating, by each of the credit rating agencies, similar or better than the EFSF’s own rating. As a consequence of Moody’s rating decision on France, EFSF’s new long-term issuances (currently rated Aaa by Moody’s) would no longer satisfy this criteria.
The EFSF has been assigned the highest quality short-term rating by all three credit rating agencies – Standard & Poor’s ‘A-1+’, Moody’s P-1 and Fitch Ratings ‘F1+’. The lead managers mandated for this transaction are JP Morgan, Morgan Stanley and Natixis.