State to issue €17.7Bn in bonds in 2022

 In Bonds and Gilts, News, Public Financing

The Portuguese State will issue, through its debt and treasury agency IGCP, bonds worth €17.7Bn to finance the public sector.

However, the actual estimate for government spending needs this year have been calculated at €10.9Bn.
The estimates feature in the IGCP’s Financing Programme 2022 which outlines the general policy to be followed in terms of managing Portugal’s direct debt.
“The financing strategy for 2022 is centred around issuing public debt securities on the financial markets through the regular issue of Treasury Bonds to facilitate liquidity and the smooth operation of the primary and secondary markets”, says the agency led by Cristina Casalinho who also adds that there may be “opportunities to undertake bond exchange and repurchasing operations”.
According to the IGCP, the State intends to borrow €17.7Bn from the markets in exchange for Treasury Bonds in 2022, sold via syndicates and auctions.
In syndicated bond offerings, a government debt office (IGCP in this case) will appoint a panel of underwriters, banks and broker-dealers. They’re called syndicated transactions because the banks will form a debt syndicate, a group of underwriters, usually investment banks, who will manage the debt offering.
In addition to servicing the Republic’s long term debt, the IGCP will issue €3Bn in Treasury Bills. “In 2022, the net liquid finance resulting from the issue will have a positive impact of €3Bn”.
The IGCP plans to hold treasury bond auctions on 19 January at an amount between €1,2Bn and €1,5Bn. On 16 February it will issue between €1Bn and €1.2Bn, and on 16 March, another auction for €1.5Bn and €1.7Bn.
In addition, the State expects to receive €1.2Bn in European money. From National Savings Bonds, Treasury Certificates, and Post Office Savings Certificates, it expects to raise €0.1Bn.
The IGCP will also count on €0.7Bn from “other financing” including the “centralisation of funds from other State Central Treasury entities.
According to estimates for the Stability Programme 2021-2025, total State financing requirements will be €24.3Bn, below the requirements for 2021 which were €26.2Bn.
Net financing needs will be around €10.9Bn which compares to €13.4Bn required in 2021.