Portugal raises €3 billion in debt sale as interest rate soars

  • ECO News
  • 6 April 2022

Portugal's financing costs worsened significantly, even with strong investor appetite. Demand exceeded 15.5 billion, five times supply.

Portugal raised €3 billion in a 10-year syndicated bond issue on Wednesday. The operation met strong demand, which exceeded 15.5 billion. Even so, the costs rose significantly, reflecting the current market conditions.

With the order book closed, the final terms of the operation are these, according to the financial information agency IFR, Portugal will have to bear an interest rate of around 1.7%.

Investors placed orders for more than €15.5 billion, including a slice of €1.7 billion supported by the banks that backed the IGCP in this operation that will establish a new ten-year benchmark in Portugal’s debt market. The agency that manages the public debt will give more details in the afternoon, namely about the profile and origin of the investors, if it follows the usual procedures.

Barclays, BBVA, CaixaBI, Deutsche Bank, JPMorgan and Santander are the banks hired by IGCP to sell the bonds maturing on July 16, 2032 with ratings of Baa2 from Moody’s and BBB from S&P and Fitch.