Portugal borrows €1Bn on international markets at pre-pandemic interest rates

 In Bonds and Gilts, News, Public debt

Portugal’s treasury and debt management agency IGCP sold €1Bn in 10-year treasury bonds on Wednesday at low interest rates not seen before the pandemic, despite political and government uncertainty.

The IGCP paid an interest rate of 0.314% to issue bonds with a 2031 maturity worth €686 million, the lowest level of interest on borrowing from the international money markets since September 2019 (0.264%). In the previous auction of 10-year bonds, the rate of interest that had to be paid to investors was 0.397%.
Additionally, €314 million in bonds that mature in 2037 were also issued (15-year bonds) by the agency that manages Portugal’s public debt and is run by Cristina Casalinho. (pictured)
The interest rate on this bond was 0.622%, representing an increase of 0.622% in interest in relation to previous auction (0.609%) in July.
The latest debt auction was a return by the IGCP to debt auctions after a four-month interregnum and took place during a period of political and governmental deadlock in Portugal with a general election expected to be held in January next year and a State Budget only ready by the summer.
The debt auction was also held at a time when investors are carefully watching developments in the European Central Bank’s monetary policy within the context of higher, albeit probably temporary, inflation.