BRUSSELS (MNI) – Schemes to leverage the firepower of the European
Financial Stability Facility are gaining investors’ interest despite the
fund’s downgrade by Standard & Poors’ last week, and one approach has
attracted E60 billion already, the bailout fund’s chief, Klaus Regling,
said late on Monday.
EU leaders last October to try to stretch the cash of the bailout
fund further by allowing it to issue credit insurance certificates and
to establish joint investment funds with outside investors to buy
Eurozone debt.
Regling said that there was “great investor interest in the EFSF’s
insurance certificates” and that investors so far have “committed E60
billion to co-investment funds.”
The EFSF had received “positive feedback from investors outside
Europe,” he said.
The EFSF registered its first co-investment fund, headed by former
EU Commission President Jacques Santer, in Luxembourg on January 19.
Regling said investor reaction was “limited” to Standard & Poors’
decision last week to strip the bailout fund of its top-notch credit
rating for long term debt.
Moody’s and Fitch still give the EFSF their highest ratings and
have no imminent plans to change that, he noted.
The downgrade “will not affect the EFSF’s capacity to leverage its
resources,” and “a leverage ratio of three times or more is possible and
is confirmed in our talks with investors,” Regling said.
–Brussels bureau: +324-9522-8374; pkoh@marketnews.com
[TOPICS: M$$CR$,MGX$$$,M$X$$$]
