1,735 million euros’ debt reimbursement pushed to 2022

  • ECO News
  • 30 August 2017

IGCP was able to repurchase 1,735 million euros in debt maturing in the upcoming three years. It exchanged it for bonds maturing in 2022, which will help the reimbursement needs between 2018 and 2020.

Portugal was able to repurchase 1,735.7 million euros in Treasury bonds maturing in the upcoming three years, having offered a new five-year debt in exchange. With this bond exchange operation, IGCP is mitigating its reimbursement needs between 2018 and 2020, pushing the debt to 2022.

As a counterpart for keeping these securities, the agency managing the Portuguese public debt stated they have sold a total of 1,793 million euros to investors in bonds maturing in 2022. The difference between the amount repurchased and issued will come from small adjustments in the prices of the repurchases of old securities and in the prices of the sale of new securities.

IGCP’s prediction was to repurchase bonds maturing in 2018, 2019 and 2020 this Wednesday morning. And they did repurchase part of that debt. More exactly, the institution headed by Cristina Casalinho was able to hold 426.7 million euros in debt which should be returned next year. As for bonds maturing between 2019 and 2020, IGCP repurchased 401 million euros and 908 million euros, respectively. This debt will only be paid in 2022.

By exchanging these debt securities for different ones maturing in 2022, IGCP is mitigating the debt reimbursement effort it will have to make in the upcoming three years. Before this operation, Portugal had around seven billion medium-term bonds to reimburse until 2018 (427 million euros less, now). Medium and long-term bonds’ reimbursements increased to around ten billion and 11 billion euros in 2019 and 2020, respectively; these amounts will also decrease with this operation as each line is repurchased.

All in all, out of a total of around 28 billion euros in reimbursements predicted for the upcoming three years, IGCP was able to push forward to 2022 just 6% of the reimbursement; by then, Portugal will have to pay an over 10 billion euros’ reimbursement.