The European Union said on Monday it would issue a new 10-year benchmark bond this week to fund lending to Portugal.
"The first transaction by the EU/EFSM will be a benchmark bond with 10 years maturity due in September 2021," the European Union said in a statement. "The bond is expected to be launched during the course of this week."
The funds will be raised via the European Financial Stabilisation Mechanism, which is underwritten by the EU budget. EFSM issuance is being coordinated with the European Financial Stability Facility (EFSF) to ensure smooth market operations.
The EU said the EFSF, a 440 billion euro fund that has so far been used to bail out Ireland and Portugal, would not launch any long-term bonds until euro zone member states have approved changes to the fund, which is expected by mid-October.
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