Portugal obtains 1,492 million with a ten-year rate below 1%

  • ECO News
  • 13 May 2020

IGCP obtained 1,492 million euros from the markets. If it paid more for the five-year bonds, the ten-year bond rate fell and was again below 1%.

This Wednesday, Portugal obtained 1.492 million euros from the markets. The Portuguese Treasury (IGCP) paid more for five-year bonds, but saw the cost of ten-year bonds fall compared with the previous auction.

In the ten-year line, the benchmark in the markets for issuing 742 million euros in Treasury bonds (T-Bonds), the IGCP accepted an average rate of 0.852%, below the 1.194% paid at the previous comparable auction held on April 22, in the middle of the coronavirus pandemic.

Concerning five-year bonds, the rate worsened considerably compared to March’s auction, i.e. even before the impact of the pandemic on the markets: Portugal went from the 0.059% recorded in March, to now paying a rate of 0.258%, through a “loan” of 750 million euros.

In both lines, demand was about twice as high as supply.

In total, the IGCP got 1,492 million euros from the markets this Wednesday, above the indicative amount of between 1,000 million and 1,250 million and within a framework of greater stabilisation in costs compared to last month’s operation, in which interest rates soared in face of investors’ distrust of what could be the effects of the pandemic on the growth of public debt and, consequently, on countries’ ability to honour their commitments.