Once again, IGCP issues short term debt next Wednesday, taking advantage of the negative interests' environment to finance in six to 12 months Treasury bills.
Portugal returns to the debt market next week, aiming to issue up to 1,500 million euros in six to 12 months’ Treasury bills, while the country benefits from a favorable environment of low interest.
“On the 15th of November at 10:30 a.m. (11:30 a.m. CET) IGCP, E.P.E. is going to auction two Treasury Bill lines maturing on May 2018 (BT 18MAY2018) and November 2018 (BT 16NOV2018) with an indicative global range amount of EUR 1250 million to EUR 1500 million”, according to IGCP (Portuguese Debt Management Agency).
This Wednesday, IGCP raised 1,250 million euros in ten-year bonds, in a financing operation that paid the lowest interest ever (1.939%).
Considering the market’s behavior, the Portuguese Treasury should register negative interest rates in this double auction of short term debt, in line with the rates that have been observed in the past few bill auctions. Currently, the implied yield for six months bills fell to -0.413% and the rate of 12 months bills stands at -0.329%.
In this low interests’ environment, the Portuguese Government has accelerated the rhythm of early repayments to IMF. Portugal already repaid 66% of its loan to the Fund headed by Christine Lagarde, but is expecting to pay another 3,000 million by the end of the year, which will enable a reduction of the costs of the debt.