Europe's bail-out fund set to raise €4.5bn Investors flocked to buy new bonds of the eurozone rescue fund on Monday as the improved sentiment around Europe and the single currency helped strengthen demand. Order books for the European Financial Stability Facility's first 20-year bond rose to €4.5bn, three times the amount bankers had hoped to raise in a sign of the success of the offering. The demand prompted bankers to lower the yield the bond is expected to be priced at to 3.96 per cent, or 115 basis points over mid-swaps, the European reference point for funding bond issues. The healthy interest comes following the success of other long-dated transactions from public sector issuers. Last week, the Kingdom of Belgium sold a €4bn 20-year syndicated issue that attracted €6.4bn of demand from accounts across Europe. The strong demand is in contrast to previous EFSF bonds, which had struggled because of worries over the health of the eurozone. It is particularly impressive as it is considered harder to sell longer-maturing bonds. The EFSF has not sold bonds beyond 10 years in maturity before today. The money is to be used for the bail-out of Ireland and Portugal. The EFSF mandated BNP Paribas, Commerzbank and DZ Bank. The EFSF had been contemplating a 30-year deal but appears to have settled for the slightly shorter and safer maturity. The lead managers went out with guidance in the 120bp area over mid-swaps, which should give a coupon of around 4 per cent, a yield which is a key target for insurance companies who tend to be big buyers of long-dated issues. It is the second bond deal of the year from the rescue fund, which successfully sold €1.5bn of debt in January despite being downgraded from its top-notch triple A credit status in the same month. However, the first deal was for six-month bills, which are considered much easier to sell. The EFSF had been downgraded one notch to AA+ by Standard & Poor's only days before.