Portugal to issue €1.25Bn in bonds to pay back the IMF
Portugal’s Treasury and Public Debt Management Agency will hold an auction on Wednesday for five and 10 year bonds.
The €1.25Bn expected to be raised from the bond issues will be used for “early repayment of part of Portugal’s (bailout) loan to the IMF”.
In a letter aimed at potential investors, the institution headed by economist and banker Cristina Casalinho, states: “The IGCP will undertaken two auctions of Treasury Bonds on 14 November at 10.30am.”
“The bonds will mature on 25 October 2023 and 17 October 2028 respectively with a total amount raised of €1.250Bn,” states the communiqué issued by the entity.
Portugal’s ratio of public debt to GDP in terms of percentage reached its highest point in Q3 of 2016 when it reached 132% of GDP. In the first and second quarters of this year Portugal’s public debt was around 120%-125% of GDP.
Praised by the European Union for sticking rigidly to austerity measures, Portugal is working hard to break away from its 25-year long budget deficit.
It had been in financial trouble since the sovereign debt crisis of 2011 after several years of economic mismanagement led to very high levels of indebtedness raising market fears that Portugal would not be able to pay back its loans.
The Portuguese government is now forecasting a budget surplus with state expenditure lower than revenues.
According to the Finance Ministry, there will be a surplus of 0.25% of GDP by 2020.