Portugal pays highest 10-year funding cost in 12 years

Portugal raised €1.426 billion in two government bond auctions on Wednesday, with the cost of 10-year funding climbing to its highest level in 12 years, according to auction results published by IGCP, the country’s debt management agency. The move shows Portugal is paying more to borrow in long-term debt markets despite solid demand.

The Treasury sold €755 million of 10-year bonds at a yield of 3.452%, up 14.8 basis points from the 3.304% paid in a similar auction on April 8. Demand was 2.05 times the amount on offer. According to the historical auction data, this was Portugal’s most expensive 10-year bond sale since April 23, 2014, when it paid 3.592%.

In the four-year auction, IGCP placed €671 million at a yield of 2.834%, with demand reaching 2.07 times the amount offered. That was almost 49 basis points above the 2.347% paid in a comparable operation on April 9, 2025, and, based on IGCP historical data, the highest cost for a bond of that maturity since at least 2014.

Filipe Silva, investment director at Banco Carregosa, said the rise in long-term yields points to a market reassessment of macroeconomic conditions and medium- to long-term risk. The auction results suggest investors remain willing to buy Portuguese debt, but only at higher returns.

Originally published at Eco.pt