April 20, 2017 / 2:19 PM / 3 months ago

Euro zone bailout fund to issue dollar-denominated bonds at year-end

2 Min Read

WASHINGTON, April 20 (Reuters) - The euro zone's bailout fund, the European Stability Mechanism (ESM), is preparing to issue dollar-denominated bonds by the end of the year to tap investors who only buy dollar-denominated assets, ESM chief Klaus Regling said on Thursday.

"We are preparing the first dollar-denominated issue towards the end of the year," Regling told a seminar at the Atlantic Council in Washington, adding the ESM would hedge the issue to deal with exchange rate risk.

Regling, who was speaking on the sidelines of the IMF and World Bank's spring meetings, did not give the possible size of the dollar-denominated issue.

He said the ESM, which issues bonds to finance its lending to troubled sovereigns in the euro zone, would be issuing between 50 billion euros and 60 billion euros in bonds each year to finance its existing rescue programmes.

The ESM and its predecessor, the European Financial Stability Facility (EFSF), were created in the wake of the sovereign debt crisis in the euro zone and have so far disbursed 265 billion euros in emergency loans to Ireland, Greece, Portugal, Cyprus and Spain. (Reporting by Jan Strupczewski; Editing by Paul Simao)

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