Portugal pays the lowest interests ever for five and ten-year debt

Portugal was able to raise 1,207 million euros with five and ten-year debt with the lowest interests ever in both maturities. Debt maturing in ten years has a 1.670% interest rate.

This rate for 10-year Treasury bonds is positively comparable to the auction from last March, in which Portugal paid a 1.778% interest rate. As for five-year bonds, the rate was 0.529%, also a record: the February issuance had registered a 0.577% rate.

IGCP had set a goal of raising between one billion and 1,250 million euros. It ended up raising 724 million in ten-year debt and 438 million in the shorter maturity. The total stood within that range: 1,207 million euros.

In fact, investors wanted more bonds, but the agency headed by Cristina Casalinho ended up not making a largest amount available. Demand for ten-year bonds was stronger than in the previous auction. As for the five-year maturity, it was quite the opposite: although demand for shorter maturities was lower that the March issuance, it was three times higher than supply.

Accelerating investment

Portugal continues to be able to place long-term debt with attractive rates. Portugal has been taken advantage of the context of low interests, sponsored both by ECB and by the upward revisions to Portugal’s rating — Moody’s is the only agency that has not yet removed the country from the “junk” status –, to accelerate this year’s financing.

In the end of the first four months of the year, IGCP had assured over 60% of the 2018 financing needs. Cristina Casalinho told ECO she wants to raise two thirds of the overall financing needs by the end of this semester.

“The financing rule on sovereigns points to a financing in the first semester that corresponds to, at least, 65% of this year’s needs. This rule is based on the calendar itself, that is, that there are two less months to issue: August and December”, she concluded.