Portugal to issue up to 4.5 billion in short-term debt in Q1
The first Treasury bill auction will take place next week, according to the agency that manages public debt. In the year's total, it plans to issue 13,252 million, with 11,983 million to be repaid.
Portugal will issue up to 4.5 billion euros in short-term debt in the first quarter of the year, according to the funding programme of the Treasury and Public Debt Management Agency (IGCP). The first auction of Treasury Bills (T-Bills) will take place next week.
“In 2020, the net funding resulting from BT emission is expected to result in a positive impact of 1.3 billion euros,” reveals the agency led by Cristina Casalinho. “The IGCP will maintain monthly auctions of LV on the 3rd Wednesday of each month and, if investor demand justifies it, can also use the 1st Wednesday.”
The first LV auction in the first quarter of 2020 will take place on Wednesday 15th January. The IGCP intends to place, on that day, between 1,500 million and 1,750 million euros, at six and 12 months. After that, there will be new T-Bill placements on February 19th and March 18th. In total, between 3,750 million and 4,500 million euros can be issued between January and March.
Over 2020, the IGCP expects to issue 13,252 million euros, with 11,983 million euros to be reimbursed to the market. In other words, the net positive impact will be around 1,270 million euros. Along with short-term debt, “the issuance strategy will be maintained along the whole curve, combining short terms with long terms”, explains the Treasury.
Thus, “an amount of 16.7 billion euros will be obtained through gross issuance of T-Bonds [Treasury bonds], combining unions and auctions, ensuring monthly issues.” 8,019 million to be repaid, so the estimated net amount is 8.698 million euros.
“The T-Bills auctions will have the participation of the Specialized Primary Dealers (OEVT) and Other Auction Participants (OMP) and will be held on Mondays and Wednesdays of each month. The indicative amount and the T-Bonds lines to be reopened will be announced to the market up to three working days before the auction.”
The IGCP also leaves open the possibility of exchanging and repurchasing securities, as it has done in recent years to make use of the low financing costs in the market. The average interest rate paid on debt issued by Portugal between January and November was set at 1.1%, a new all-time low, with data for the 2019 total expected to reveal the lowest costs ever.
