The issue comes at a time of rising debt interest rates caused by the impact of the Covid-19 pandemic on the world economy and after Fitch downgraded Portugal's rating outlook.
Portugal paid more to issue debt. At a time of rising funding costs for most southern European countries, the Treasury and Public Debt Management Agency (IGCP) placed 1.016 million euros, this Wednesday, in a six- and ten-year double auction of Treasury bonds (T-Bonds).
At the benchmark maturity, the country issued 598 million euros, with an interest rate of 1.194%. The last time Portugal had financed itself for ten-years was on March 11th, having then paid an interest rate of 0.426%. In other words, compared with that auction, the interest rate almost tripled.
For the six-year T-Bonds, Portugal placed 418 million at a rate of 0.843%. This also represents a strong increase since in the last comparable issue, on February 12th, the country had financed itself with a negative interest rate of -0.057%.
The issue comes at a time of rising interest rates on debt caused by the impact of the Covid-19 Pandemic on the world economy. Portugal paid back to place short-term securities, which had not happened since 2016, and the medium term debt has been worsening. Reflecting concerns about this impact, the Fitch agency downgraded Portugal’s rating outlook last Friday.