Portugal raises €1 billion with lower interest rates
IGCP raised one billion euros, the maximum amount intended, in a financing operation in which costs were lower than those of comparable issues.
Portugal returned to the market with a double auction of long-term debt. The country obtained €1 billion, the maximum amount intended, in a financing operation in which costs were lower in relation to comparable issues. Emphasis on the interest rate on ten-year Portuguese government bonds (OT) that shrank to 0.397%.
According to Reuters, the Treasury and Public Debt Management Agency (IGCP) placed €700 million in OT maturing on October 17, 2031. It took advantage of a rate of 0.397%, which was lower than the rate registered in the auction with the same maturity held less than a month ago, on May 12, when the country paid 0.505%.
This drop in rate, in addition to the demand that exceeded supply by 1.53 times, is justified by some easing of interest rates in the secondary market, with the yield on government bonds currently at 0.4%.
Despite inflation being at 2% in Europe, investors remain confident that the European Central Bank (ECB) will maintain the current accommodative monetary policy to aid the recovery post-Covid, but will also continue in the market to buy government debt.
The ECB’s “bazooka” also allowed the IGCP to achieve a low rate in the shorter maturity, at six years. In OT maturing in 2027, Portugal placed €300 million, with the rate being negative: -0.162%.
