Portugal in €1.5Bn bond issue
Portugal has placed €1.5Bn of sovereign bonds on the market at interest rates similar to those charged before the Covid-19 pandemic.
In an auction of State Treasury Bonds with a 10-year maturity, €920 million were issued at a 0.595% interest rate, significantly lower than the last issue in May (0.852%) and at around the same financing cost in March (0.426%).
In the 6-year issue, the Government brought in 3585 million at an interest rate of 0.137%, again lower than the April issue (0.843%).
This reduction in interest rates took place one day after the Government presented its Supplementary State Budget for 2020 from which it is estimated that after a four year sustained fall in interest rates on bonds, the ratio of public debt has suffered a significant increase this year because of the effects of Covid-19 on economic activity and the increasing burden on Public Administration.
The success of the double auction shows the confidence that international investors have in the continuing budgetary policy and sustainability of public finance as a result of a confidence won over the past five years.