Portugal gets 1,750 million in short-term debt. Interests were negative, but increased
Once again, IGCP had negative rates, but interests increased both in six and 12-months' maturities. The rate stood at -0.272% in the one-year maturity.
Portugal was able to finance itself in 1,750 million euros through short-term debt. It was successful in the amount, but although interests remained below zero, they were higher than in the previous issuance. Rates increased in both the six and 12-months maturities.
The global indicative amount stood between 1,500 and 1,750 million euros. The Portuguese Debt Management Agency (IGCP) ended up achieving the maximum amount, placing 500 million in six-month maturities and 1,250 million in long-term maturities. There was a larger demand in the short term maturity.
Rates decreased again. Portugal was able to finance itself with negative interest, although this time, they were not a record. After a -0.424% rate in March, this issuance had a -0.351% interest rate in the six-month maturities. As for the 12-months maturity, the rate was -0.272%, which is comparable to the -0.389% from the previous identical issuance, also in March.
In spite of the increase, interest rates remain extremely low, which reflects the European Central Bank monetary policy, which remains very expansionary. Public debt purchases, along with the improved signals in the Portuguese economy — which translate into quality ratings — assure a reduced financing cost both for short and long-term maturities.
This short-term debt issuance follows last week’s long-term issuance. IGCP went to the market to place five and ten-year debt, in an operation that raised 1,207 million euros. In this double bond auction, both maturities had the lowest interest rates ever. The ten-year maturity ha a 1.670% interest rate, and the five-year maturity had a 0.529% rate.
