Portugal sells six- and 12-month debt with negative yield

The Treasury went to the market this Wednesday for a double auction of six and 12-month Treasury bills.

The Treasury and Public Debt Management Agency – IGCP placed 1,750 million in six- and 12-month Treasury bills (T-Bills) at a double auction held this Wednesday morning. For both maturities, the rate requested by investors was lower than the last comparable issue.

Portugal’s Treasury sold 1,250 million euros in 12-month Treasury bills at an interest rate (yield) of -0.497%. The last bond auction with this maturity took place on July 15, when the country had achieved an interest of -0.452%.

For the six-months T-Bills, this Wednesday’s issuance raised 500 million euros, and the rate stood at -0.52%. It fell from -0.467% at the last comparable auction.

The interest rate slump occurred despite a decline in investor appetite. In the 12-month T-Bills, demand was 1.86 times higher than supply and, in the shorter bonds, demand exceeded supply by 2.36 times.

Portugal continues to finance itself on favourable terms, with the help of successive central banks and the monetary as well as budgetary measures that have been announced. The country has been issuing low-cost, long-term debt and negative short-term bond yields.