Spain Crisis Lender for Regions Can Tap ECB to Fill Coffers
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The Spanish government’s bank channeling aid to cash-strapped regions can keep a lid on its funding bill by tapping the European Central Bank for loans that cost it a fraction of the amount bond investors will charge.
While Instituto de Credito Oficial has sold 60 percent of the 20 billion euros ($25 billion) in bonds it planned to issue in 2012, the lender is also able to use its banking license to access the ECB’s facilities, said Antonio Cordero, its head of funding and treasury. That allows the institution to access money at 1 percent, compared with a cost of more than 5 percent from investors for its three-year debt.