In Brief
Sigh of relief after Spanish and Italian bond sales LONDON (AP) – Europe got a measure of relief from its debt crisis yesterday after Spain and Italy successfully tapped investors for more money and amid reports that Germany is ready to back proposals to increase the powers and size of Europe’s bailout fund. Still, European leaders face a struggle to come up with longer-term fixes amid fears that Portugal may soon be forced to seek a financial rescue. The positive bond auctions come a day after Portugal – most people’s favorite candidate to join Greece and Ireland in the bailout club – easily borrowed 1.25 billion euros ($1.6 billion), which helped set the tone for yesterday’s offerings from Spain and Italy. Spain raised 3 billion euros via an auction of five-year bonds and investor demand, as with Portugal, was more than double what was being offered. And though the interest rate the Spanish government had to pay rose, it was not astronomical. The yield spiked to 4.542 percent from 3.576 percent the last time the bond with a 2014 maturing was offered, in line with developments in the bond markets following the stresses caused by the 67.5-billion-euro bailout of Ireland. A similar picture emerged in Italy, which is considered less vulnerable in Europe’s debt crisis than Spain. The Italian government sold 6 billion euros in medium- and long-term bonds, with room to spare. Again, though the yields on the two offerings spiked up higher than the last time, they weren’t anything to get too worried about. Given this underlying relief – after all, only a few days ago, there was speculation that there could be a major disappointment lurking somewhere in this week’s auctions – the euro has shot up to one-week highs above $1.32 as the bond market pressure on countries like Portugal and Spain eased further. Belgrade extends deadline for Telekom Srbija bids The Serbian government extended the deadline for binding bids for Telekom Srbija AD to March 21, Deputy Finance Minister Vuk Djokovic said in Belgrade yesterday. Deutsche Telekom AG, Telekom Austria AG, France Telecom SA, America Movil SAB and Weather Investments SpA have bought the bidding documents and Turkcell Iletisim Hizmetleri AS is expected to do so. The original deadline was February 21. «We think there will be six offers,» Djokovic said in a telephone interview. The list of expected bidders misses Russia’s VimpelCom Ltd, which originally also qualified for the process. The government has put on sale a 51 percent stake in Telekom Srbija and expects a minimum price of 1.4 billion euros ($1.84 billion). (Bloomberg) Gas deal The European Union and Azerbaijan signed a deal yesterday in which the Caspian country commits to supply Europe with «substantial volumes of gas,» an agreement the EU said was an important step to reduce the bloc’s dependence on deliveries from Russia. However, Baku has not yet decided whether the EU-backed Nabucco pipeline project will get the award from the big Shah Deniz II gas field, or whether the contract will go to smaller rival projects. Moscow’s disputes with Ukraine and Belarus have in the past cut off supplies to Central and Western Europe, making European policymakers keen to develop alternative routes to get their gas. Currently, the EU gets about 40 percent of its natural gas from Russia. «This is a major breakthrough,» European Commission President Jose Manuel Barroso, who signed the agreement with Azeri President Ilham Aliyev in Baku, said in a statement. «This new supply route will enhance the energy security of European consumers and businesses.» (AP) Advisers hired Greece hired banks to advise on options which may include a sale of stakes in the country’s public gas company DEPA SA and Hellenic Defense Systems SA. Alpha Bank SA, N M Rothschild & Sons Ltd and UBS Limited were retained to advise on options for DEPA and KPGM Advisors SA for Hellenic, according to an e-mailed statement from the Athens-based ministry yesterday. (Bloomberg)
