EFSF draft includes 30% bond guarantee

Draft guidelines for the European Financial Stability Facility indicate the fund could insure bonds of troubled eurozone countries with guarantees of 20 to 30 per cent of each issue, says Bloomberg. The insurance would be in the form of tradable partial protection certificates, to be issued by an independent Luxembourg-based special purpose vehicle, and would enable the EFSF to almost triple its €440bn firepower. The draft also discusses increasing the EFSF through forming “credit investment funds” with private investors to buy debt issues by struggling eurozone economies, the news agency says.