Portuguese State wants 500 million through a new issuance of retail debt

  • ECO News
  • 24 March 2017

After the market issuance, the IGCP is once again betting on families to finance the public debt. On March 27, there will be another OTRV issuance, but this time the Agency will only pay 1.9%.

A new issuance of OTRV (sovereign bonds sold to retail investors – Obrigações do Tesouro de Rendimento Variável) is coming. The Portuguese will be able to invest 500 million euros in those bonds exclusively aimed for retail: the 1.9% rate being offered to small investors is the lowest ever offered for this type of operation concerning this new State financing product.

In the fourth issuance of these titles, the OTRV had a “variable interest rate equal to 6-month Euribor plus 1.90%; the payment of principle will take place on April 12, 2022”, stated the Agency headed by Cristina Casalinho. This year’s issuance rate for OTRV, the sovereign bonds sold to small retail investors, is smaller than those made last year, when these instruments were first issued. It is comparable to the 2% rate in November, 2.05% in August and 2.2% in April. However, it is in line with the five-year Portuguese debt secondary market: 1.87%.

The operation has an “initial global nominal value of up to 500 million euros, which the issuer is able to increase, until March 31, 2017; if this is the case, a press release will be disclosed for that purpose before the due date”, is stated by IGCP. The subscription term takes place between March 27 and April 7, 2017.

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