The European Union is selling €4.75 billion of 10-year bonds to help fund the bailouts of Ireland and Portugal.

The EU is offering the bonds through its European Financial Stabilisation Mechanism, or EFSM, according to three people with knowledge of the transaction, who declined to be identified before it's completed. The deal is the third from the EFSM and follows Portugal's request for rescue loans on April 7th.

The EU is preparing to sell the top-rated bonds after saying last week that there'll be 13 debt issues from its bailout funds in 2011. It had planned eight issues for an Irish bailout before the Portugal rescue.

"The sale should be very well-supported given it's a triple A rated asset," said David Schnautz, a fixed-income strategist at Commerzbank AG in London.

Amadeu Altafaj, economic policy spokesman at the European Commission, which runs the EFSM, couldn't be reached by telephone or e-mail for comment.

The bonds may be priced to yield about 16 basis points more than the mid-swap rate and the sale's due to be completed tomorrow, said the people. The deal is being managed by BNP Paribas SA, Credit Agricole CIB, Credit Suisse Group AG, DZ Bank AG and JPMorgan Chase and Co, the people said.

The EFSM will subsequently issue five-year notes in another deal to be arranged by Deutsche Bank AG, HSBC Holdings Plc, Société Genérale SA and UBS AG, another banker said.

The EU's other rescue fund, the European Financial Stability Facility, is overseen by euro-area governments.

Bloomberg