EFSF releases €3.6 billion to Ireland

According to sources from European Financial Stability Facility (EFSF), Ireland has been released the first tranche of €3.6 billion (£3 billion) – a little higher than the initially agreed €3.3 billion, from the euro zone rescue fund.

Ireland will be paying an effective rate of interest of 5.9 percent per annum.

The EFSF had sold 5 year maturity bonds for the first time to raise €5 billion last month.

The funds are part of a greater €85 billion rescue fund approved by the EU/IMF consortium to rescue the country’s struggling banking sector – which is yet to recover from staggering losses suffered due to bad loans and follows Greece, which sought a similar bailout package last year.

Reuters reported a source as saying: “As part of the EU/IMF financial support package agreed for Ireland, EFSF transferred 3.6 billion to the Republic of Ireland”. Since EFSF was successful in raising €5 billion, “the amount transferred to Ireland was higher than the minimum 3.3 billion agreed”, he added.

The EFSF has said that it will issue two more benchmark bonds to raise money for Ireland and both issues will vary between €3 and €5 billion. IMF plans to raise a total of €17.6 billion in 2011 and €4.9 billion in 2012 by selling bonds.

The first EFSF bond was issued at an implied rate of 2.89 percent.