Investors in Asia piled into bonds sold yesterday by the European Union to help finance aid for Ireland, according to EU figures.
Asia accounted for 21.5 per cent of the €5 billion of the five-year securities, compared with its 4 per cent average for EU bond sales since December 2008, the European Commission in Brussels said today.
Europe represented 71.5 per cent - with the UK taking 16.5 per cent - and the Americas 6 per cent, the commission, the EU executive arm, reported.
The EU has looked to China over the past year for support in tackling the euro-area debt crisis triggered by Greece, which received a €110 billion rescue in May. Ireland followed in late November with an €85 billion package.
Chinese vice commerce Minister Gao Hucheng said yesterday in Madrid that China will buy Spanish public debt in the primary and secondary markets.
During a visit to Brussels in early October, Premier Wen Jiabao said China had acted as a "real friend" to the euro area through "a large quantity" of bond purchases in the past and a policy to "maintain the debt stability in the euro zone."
Central banks and other "official" institutions represented 38.5 per cent of the allocation, while fund managers accounted for 24.5 per cent, banks 22 per cent and insurance and pension companies 12 per cent, according to the commission.
Yesterday's sale was the first by the commission through its European Financial Stabilisation Mechanism as part of the EFSM's €22.5 billion share of the Irish rescue. The issue was oversubscribed and sold out in less than an hour, the commission said in a January 5th statement.
The bonds were priced to yield 12 basis points more than the mid-swap rate, leading to an interest rate for the EU of 2.59 per cent, the commission said. The interest rate on the loan to Ireland as a result will be 5.51 per cent and the funds will be disbursed on January 12th according to the commission.
Bloomberg
