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Eurozone bailout fund adopts Luxembourg law for euro bonds, ditching English law

The European Stability Mechanism will adopt Luxembourg law instead of English law to regulate its new euro-denominated bonds amid mounting Brexit uncertainty.

Starting Oct. 1, the eurozone's bailout fund will use Luxembourg law for new bonds and bills issued in euro, a move ESM CFO Kalin Anev Janse said was supported by banks and investors.

U.S. dollar-denominated bonds will continue to be issued under English law.

U.K. Prime Minister Boris Johnson is under increased pressure to secure a deal with the EU to avoid another extension, after a Supreme Court ruling declared Johnson's decision to suspend Parliament as unlawful. The ruling gives lawmakers more time to challenge Johnson's Brexit plans.

The fund intends to issue about €10 billion of bonds in 2019, including €3.5 billion in the last three months of the year, according to Bloomberg News.