Portugal re-tests the long-term debt market

  • ECO News
  • 4 September 2020

Portugal will return to the market by issuing long-term debt. Next week it will carry out a 10-year and 25-year financing operation.

Portugal will return to the long-term debt market. The Treasury and Public Debt Management Agency (IGCP) has announced that it intends to hold a double auction of debt, with maturities of 10 and 25 years. The last time it was financed with the 2045 line was just over a year ago.

“On the 9th of September at 10:30 a.m. (11:30 a.m. CET) IGCP, E.P.E. is going to auction the Portuguese Government Bonds maturing on October 2030 (OT 0.475% 18Oct2030) and on February 2045 (OT 4.1% 15Feb2045) with an indicative global range amount of EUR 1000 million to EUR 1250 million,” the IGCP said.

If the agency led by Cristina Casalinho issued 10-year debt a short time ago, on August 26, having achieved an interest rate of only 0.336%, it is necessary to go back to the summer of 2019 to find an operation with the 2045 debt line.

It was in July 2019 that Portugal issued longer-term debt, having paid 1.42% at the time, well below the 2.8% rate it had supported the previous year in the same’s auction line that continues to serve as a 30-year benchmark, although it now has a maturity of 25 years.

With this double auction, the IGCP aims to obtain funding that the Portuguese government needs in view of the expenditure it will have to bear because of the Covid-19 pandemic.