Portuguese Treasury’s debt swap pushes €700m reimbursement to 2028

  • ECO News
  • 31 January 2019

The Portuguese Treasury returned to the market for a debt swap operation this Thursday, to delay the reimbursement of €700m in debt maturing in 2020, exchanging it with bonds maturing in 2028.

This Thursday morning, the Portuguese Treasury and Debt agency (IGCP) has returned to the market for a debt swap operation. Portugal wanted to repurchase treasury bonds (OTs) which would mature in 2020, offering in return treasury bonds maturing on October 2028.

With the debt swap, the country will delay the reimbursement of €700m in bonds maturing next year. In specific terms, the IGCP repurchased €702m in treasury bonds maturing in 2020, linked with a 4.80% coupon.

In return, the IGCP has placed €702m in treasury bonds maturing in 2028, so investors have now the opportunity to purchase treasury bonds maturing nine years from now, with a 2.125% coupon linked to them.

“Once again, investors have shown a lot of trust in the Portuguese debt”, Filipe Silva, from Banco Carregosa, told ECO. “With this swap, Portugal will be “relieved” from the financial pressure it was under, especially considering that in 2020 it has many debt repayments to ensure, and at the same time long term debt issuance rates will allow for the average indebtedness costs to drop significantly”, he added.