Portugal gets negative interest rate on short-term bonds
The IGCP went to the market this Wednesday to issue Treasury Bills that reach maturity on November 20, 2020, and May 21, 2021.
Portugal went to the short-term debt market and paid less to place six and 12-month Treasury bills (T-Bills). In a double auction held on Wednesday morning, the Treasury and Public Debt Management Agency – IGCP issued a total of 1,750 million euros with negative yields.
In the case of securities with a longer maturity, the Treasury placed 1 billion with an interest rate of -0.351%. This compares with the interest rate of -0.101% that Portugal achieved in the last securities auction with this maturity, on March 18.
As far as T-Bills with shorter maturities are concerned, the agency issued 750 million with an interest rate of -0.411%. In the last comparable auction, it had achieved a yield of -0.089%.
The demand for Portuguese securities maturing on May 21, 2021 was 3.02 times higher than supply, i.e. more than double the 1.26 times recorded in the last comparable auction. T-Bills with maturity on November 20, 2020, demand was 2.69 times higher than supply, compared to 1.13 times at the last placement of securities with this maturity.
This issuance takes place after Portugal paid to issue T-Bills last month, due to fears generated by the coronavirus crisis. The last few days have, however, been a relief thanks to the European recovery plan proposed by the Franco-German axis.
