Investors lose interest in bailout fund

EUROPE’S bailout fund for Ireland and Portugal is losing its appeal as a bond issuer after investors ordered about €4.5 billion of its €3bn of notes compared with demand of nine times that on its first deal a year ago.

That is after the European Financial Stability Facility (EFSF) offered investors a yield spread almost seven times what it paid to sell €5bn of securities last January, according to data which was compiledby Bloomberg.

“The book on the EFSF bond is far from stellar at just €4bn,” said Padhraic Garvey, head of developed-country debt and rates strategy at ING Groep in the Netherlands. “A much bigger cover would have given the thing a better gloss.”