Portugal issues €1.5Bn in bonds at 6 and 12 months

The Portuguese treasury has announced that on 15 May it floated €1.5Bn in six and 12 months treasury bonds at negative interest.

The 12 month bond of €1Bn had an average interest rate of -0.370%, a new negative record and lower than that recorded on 20 March when €1.1Bn were floated at -0.366%.
The treasury issued €500 million in bonds for sale at -0.396%, even lower than on 20 March when €400 million at -0.393%.
The demand reached €2.2Bn for the 12 month bonds, 2.29 times greater than the amount floated, and €1.3Bn for the 6 months bonds, 2.62 times the amount floated.
On 17 January 2018 the average interest rates on Portuguese government bonds at six and 12 months fell to historic minimums of -0.425% and -0.398% respectively.
The negative bond yields effectively means that the Portuguese government is bing paid to borrow money, while at the same time the bond buyers pay a cash-flow instead of receiving interest income.
Central banks, insurance companies and pension funds have to own bonds, even if the financial return is negative. This is to meet their liquidity requirement, and when borrowing, they can also pledge the bonds as collateral.