Portugal pays 63% more to issue €780 million in 10-year bonds

  • ECO News
  • 14 September 2022

The Portuguese Treasury paid higher interest to place €1,250 million in 10- and four-year bonds this Wednesday.

The Portuguese Treasury and Debt Management Agency (IGCP) paid an interest rate of 2.754% to issue €780 million in 10-year bonds at the auction held this Wednesday morning. In the four-year bonds, maturing in July 2026, IGCP raised €470 million, and the rate stood at 1.777%. In both cases, the cost of funding was much higher than in previous comparable operations.

The rate fixed on the 10-year bonds (OT 1.65% 16 July 2032) compares with the interest of 1.694% that IGCP agreed to pay last April in a syndicated operation where this line was opened, with the placement of €3,000 million. The average yield obtained this Wednesday implies a 63% higher cost.

The most recent comparable auction with that maturity happened in June when IGCP raised €750 million at an average rate of 2.33%. According to Reuters, the average of the last four operations is 1.012%.

The last 4-year debt issue dates back to July 2020, when the country issued €430 million at an implied rate of -0.108%.