Portugal raises €4 billion in ten-year bond issue

Portugal financed itself this Wednesday in four billion euros, through a ten-year bond issue via a syndicate of banks. The operation attracted strong interest from investors, racking up over 30 billion euros of orders, 7.5 times higher than IGCP’s target.

The strong market appetite led the securities’ interest rate to drop during the operation that lasted all morning. On this second syndicated sale of the year, Portugal launched the operation with an initial reference price of 29 basis points plus the mid swap rate, which trades at 0.02%. However, investor interest has already lowered the premium to 28 points, according to the financial information website IFR, thus leading to an interest rate of 0.30%.

The final result of the operation is expected to be disclosed later on Wednesday by the Portuguese Treasury and Debt Management Agency (IGCP), with the data available showing that the orderbook will have reached 30 billion euros, including 1.81 billion euros from the syndicate of banks.

Portugal mandated BBVA, BNP Paribas, Caixa BI, Citi and Credit Agricole CIB to prepare the long-term financing operation.

In this year’s first syndicated sale, which was carried out in February, Portugal raised 3 billion euros in the 30-year bond issue, paying 1.02% in interest.

The 10-year rate is now at 0.22% in the secondary market, after having traded at negative values in the markets. After obtaining an interest rate below zero in January, in the most recent operation with this maturity, Portugal ended up paying 0.237%.