Government aims to raise almost €20B this year in treasury bonds

Portugal’s Treasury and Public Debt Management Agency (IGCP) plans to issue €19.8 billion of debt in Treasury Bonds (OT) this year, according to the financing programme released on Wednesday.

According to a statement from the entity chaired by Miguel Martín, the Financing Programme of the Portuguese Republic for 2023 – approved on Tuesday by Finance Minister Fernando Medina – foresees that this year, “the amount of the state’s net financing needs should stand at around €12.4 billion.”

“The financing strategy for 2023 will focus on the issuance of public debt securities in the financial markets in EUR [euros] with regular Treasury Bond (OT) issues to ensure liquidity and an efficient functioning of primary and secondary markets,” it said.

According to IGCP, “€19.8 billion will be obtained through treasury bonds issuance, combining syndicates and auctions, ensuring monthly issuances,” with the auctions “having the participation of the Specialised Treasury Securities Operators (OEVT) and Primary Market Operators (OMP) and will be held on Mondays or Wednesdays of each month.

“The indicative amount and the treasury bond lines to be reopened will be announced to the market up to three business days before the auction,” the statement said.

IGCP also estimates that the net funding resulting from the issue of Treasury Bills “will produce a positive impact of €4.3 billion”, and “the strategy of issuing along the entire curve will be maintained, combining short maturities with long maturities”.

“IGCP will maintain the holding of monthly Treasury Bill auctions on the third Wednesday of each month and, if justified by investor demand, it may also use the first Wednesday,” it states.

It added, “the indicative amount of the auctions will continue to be announced to the market via an interval,” and the decision to allocate each series will be made by IGCP “depending on demand and the respective price.

According to the statement published today, in the first quarter, IGCP has three Treasury Bill issues scheduled to raise between €1.25 and €1,5 billion in an auction on 18 January, between €750 million and €1 billion on 15 February and between €1.25 and €1.5 billion on 15 March.

IGCP also said that “issues may also be made under the EMTN [medium-term] programme, depending on market opportunities that fit in with the funding strategy”.

In terms of risk management and repurchase programme, the agency states that “refinancing risk management will imply that the financing operations to be carried out will avoid the creation of excessive temporal concentrations of repayments, as well as the possibility of carrying out debt repurchase operations,” which will be “announced to the market in due course.

“As usual, IGCP will remain flexible in introducing in the implementation of this programme any adjustments that may prove necessary in the light of market developments and financing needs throughout the year,” it added.