The Portuguese Treasury placed 850 million euros in debt maturing in 2027. Interests stood at 2.785%, below the 3.085% from July. It was the lowest amount demanded by investors this year.
This Wednesday, Portugal issued 850 million euros in Treasury bonds maturing in 2027 with a 2.785% interest. In comparison to the last comparable issuance, in July, the amount demanded by investors to finance Portugal has been lower.
This morning’s issuance, demand was 2.06 times higher than the offer, a correlation which surpasses the demand of 1.52 times registered two months ago. In July, the Portuguese Treasury had placed 685 million euros with a 3.085% interest.
This rate also stood below June’s, making the interest now demanded by investors the lowest of this year and the lowest since November of 2015. Three months ago, Portugal placed 750 million euros in ten-year Treasury Bonds for a 2.851% interest.
In spite of the fact that the nominal value of the Portuguese debt keeps increasing (most recent data shows that it stands close to 250 billion euros), Cristina Casalinho, IGCP’s president, has been able to get smaller interests to finance the country.
“Portugal is benefiting from good economic indicators and from Moody’s optimistic upgrade in the outlook of the Portuguese debt rating. ECB’s purchases have also been a major help, but Portugal is also benefiting from the financial gap in the State’s financing which has been able to extend the maturity of the Portuguese debt with these exchange operations and issuances”, Filipe Silva, asset management director of Banco Carregosa, explains. Tiago da Costa Cardoso, manager of XTB, adds that there is a “larger appetite for risk”, because “there haven’t been events that could spark instability any time soon”.
This morning’s auction was the first time the Portuguese Treasury tested the markets since Moody’s improved the outlook of the national debt, on the first of September. The expectation for this auction was that the Republic would be able to get a lower interest rate than the one from the last comparable auction, more so because Mario Draghi, president of the European Central Bank, showed his will of continuing with the expansionist policy.