Interest on Portugal’s 10-year sovereign bonds rises to 3.4%

Portugal is paying more to finance itself in the financial markets. The Portuguese Treasury and Public Debt Management Agency (IGCP) led by Pedro Cabeças (pictured), placed a total of €1.426 billion in treasury bonds with maturities of four and ten years this Wednesday, paying a higher interest rate on the benchmark debt.

In the case of bonds maturing in 2036, the country issued €755 million with a yield of 3.452%. This compares to the 3.304% demanded by investors in an auction of treasury bonds with the same maturity held on April 8th. In the secondary market, this debt is trading this Wednesday with a yield of 3.463%, although it eased compared to the last session.

“The increase in long-term remuneration signals an adjustment in market expectations regarding macroeconomic conditions and the perception of risk in the medium and long term,” explains Filipe Silva, investment director at Banco Carregosa.

In the case of shorter maturities, up to 2030, Portugal sold €671 million with a yield of 2.834%. This is the first time the country has financed itself for four years since the start of 2024. In February, the IGCP (Portuguese Treasury and Debt Management Agency) issued three-year government bonds and, at that time, raised €708 million, paying an interest rate of 2.178%. In the secondary market, four-year bonds are trading with an interest rate of 2.775%.

However, much has changed in a few months, with the energy crisis generated by the war in Iran reigniting inflation, which should force central banks to raise benchmark interest rates. Furthermore, the prospect that countries will have to spend more to finance defense is being reflected in the costs.

Source: Negócios; Credits: Now