Portugal turns more cautious on debt sales as yields rise
Portugal’s debt agency says Middle East tensions are forcing a more selective approach to bond issuance as borrowing costs rise across the curve.
Portugal’s debt agency IGCP told ECOnews that rising market volatility linked to the conflict involving Iran is forcing it to be more selective in timing sovereign debt sales.
IGCP said it has not made “significant changes” to its overall strategy and remains committed to predictable and transparent market communication. But it added that “the current context requires more careful management of issuance windows” to secure efficient funding conditions and proper execution in the primary market.
Since February 27, yields on Portuguese government debt have risen across the curve, with the sharpest move in two-year bonds, where the yield climbed 54.2 basis points to 2.587%. The weighted average rate on 12-month Treasury bills rose 48.9 basis points to 2.527%, while the 10-year yield increased 34.4 basis points to 3.355%, according to the figures cited by ECOnews.
By Friday, IGCP had issued €9.6 billion in Treasury bonds, about 40% of its €24 billion annual target. The funding calendar remains demanding: the state must raise €21.37 billion to cover debt maturities through year-end, including €11.239 billion falling due in July alone, as well as €4.2 billion in repayments to the European Financial Stabilisation Mechanism in September and October.
Originally published at Eco.pt
