Portugal issues 1,750 million in short-term debt

  • ECO News
  • 15 January 2020

The country went this Wednesday to the debt market to issue six- and 12-month Treasury bills.

Portugal financed itself with even more negative interest rates in the first short-term public debt auction held in 2020. The Treasury and Public Debt Management Agency – IGCP placed, this Wednesday, a total of 1,750 million euros in six and 12-month treasury bills (T-Bills).

In the case of longer maturity, Portugal issued 1,250 million with an interest rate of -0.482%. The cost compares with an auction on September 18 (the last time the treasury issued debt with this maturity) when the interest rate stood at -0.44%.

Six months ago, the agency led by Cristina Casalinho issued 500 million euros in T-Bills, having paid -0.487%. In the last comparable auction, the interest rate had stood at -0.463%.

In both maturities, the treasury achieved lower costs, in line with the trend of a sharp drop in interest rates requested by investors from Portugal and thanks to the strong appetite shown. Although this continued, interest gave way to previous auctions.

Demand for 12-month T-Bills exceeded supply by 1.78 times (compared to 2 times in the previous auction) and for six-month BT was 2.24 times higher than supply (compared to 4.7 times in the last comparable placement).

Portugal had already gone to the debt market this year, with a 4 billion euros syndicated sale of ten-year government bonds. But this was the first time in 2020 that the country issued short-term debt.

In 2020, the IGCP plans to issue a total of 13,252 million euros in treasury bills, with 11,983 million euros to be repaid to the market.