Portugal pays +63% on 10-year bonds

Portugal now has to pay investors more interest on sovereign gilts compared to April.

In a double auction held by the Portuguese debt and treasury agency IGCP held on Wednesday morning, the state auctioned €1.250Bn of four and 10 year debt. In the latter case, the cost of financing the borrowing was 60% higher than in April.
The IGCP reopened a 10-year maturity bond issue (OT 1.65% 16 July, 2032 raising €780 million. The yield was set at 2.754%, which compared to 1.694% in the last auction of 10-year bonds on the 6 April that raised €3Bn. That means that between the date of the first auction and the auction on Wednesday, the financing cost went up 63%.
At an auction with that maturity held in June, when €750 million in bonds was put up for sale, the average interest rate was 2.33%.
In around three months the cost of financing has risen 38%. The yields on the last four operations was 1.012%, according to Reuters.
The increase in the cost of state financing in the auction on Wednesday reflects the increase in yields demanded in the secondary market, inflated by higher interest rates set by the European Central Bank to offset inflation.
The ECB put pay to negative interest rates in June and last week raised rates by a historic increase of 75 base points.