Brighter backdrop as ESM begins public bonds sale

The eurozone’s permanent crisis resolution mechanism is selling bonds in the public market against a brighter backdrop for European peripheral sovereigns.

The European Stability Mechanism opened books on a €3bn no-grow October 2019 benchmark bond yesterday morning, with the deal set to price at 3bp below mid-swaps, the tight end of guidance.

“The ESM has been outperforming its peers; if you compare it to the EIB, it trades well through it,” said a banker away from the deal, adding that the rarity value of ESM’s bonds drove demand for its debt.