Portugal achieves new bond interest record

 In Bonds and Gilts, Markets, News

Portugal went to the international money markets again this week and managed to sell sovereign bonds at three and 11 month at a record negative interest rate.

It obtained the lowest ever interest rates on both maturities as the country continues to benefit from the best financing conditions and the Public Debt and Treasury Management Agency (IGCP) led by Cristina Casalinho, placed a total of €1.250Bn in bonds on the market.
For the 11 month bonds which mature on 18 March 2022, IGCP placed €800 million on the market with a yield of -0558%. The last time that the country had issued 11 month bonds was in February and at that time achieved a -0.524% interest rate.
The value of interest demanded by investors therefore continues to decrease and hit new records that have never been seen before now.
Regarding three months bonds, which will mature on 16 June, 2021, the yield achieved was -0.599% for the issue of bonds worth €450 million.
At the last comparable auction, which also took place in February, a new record had also been hit with an interest rate of -0.543% and has hit a new record again now.
The plummeting interest rates — which has been a trend in both the primary and secondary markets — has gone hand in glove with investor appetite for national debt.
The demand for the 11 month bonds was 3.04 times higher than the offer (which compares to the 2.75 times achieved at the last comparable auction), while the demand for the three months bonds from investors was 3.65 times greater than the offer (compared to 2.87 in August last year).
This was the first auction carried out this quarter in which the agency hopes to net a total of €4.25Bn in short term debt.
The next bond auctions will take place on 19 May and 16 June when the IGCP will undertake both syndicated sales and treasury bonds.