Portugal today placed its projected maximum debt issuance, 1,500 million euros, but had to pay a slightly higher interest at the previous auction and broke the downward trend seen since early this year.
According to Treasury data Luso, investors bought 1,000 million euros in letters to a year in exchange for a return of 3.9 percent, 25/100 over the equivalent of the previous auction, held last March.
The other 500 million today placed securities were purchased six months at an interest rate of 2.93 percent, just three hundredths higher than the rate recorded in the last antecedent, in early April.
The demand once again significantly exceeded the supply of bonds available in this auction lusos, multiplied by 2.7 times in the case of letters a year and quadrupling in the case of the letters to six months.
Analysts attribute this interest to the fact that the maturity of the securities is within the term of the financial assistance plan signed by Portugal to the European Union (EU) and the International Monetary Fund (IMF).
The rise in interest filed today, despite being small, it nevertheless represents a change in the trend this year, in which Portugal had succeeded in all issues, pay less and less to place its debt.
Still, the outcome of the auction reflects that market pressure is relatively low and the country can be financed in the short term at rates more affordable than those required from April last year.
After the bailout request in that month, investors demanded by the Portuguese letters to three, six and twelve months interest very close to 5 percent.
That feeling of less pressure to match the Lusitanian media specialists, is also perceived in the secondary market, where buying and selling the securities purchased in public auction in which there is a marked downward trend in recent three months.
Just today, the obligations to ten years lusas traded at 10.52 per cent, far from the 17 percent that will exceed the end of January.
Thus, the difference with the ten-year German bond debt stood Portuguese in 883 basis points.
In five years, the titles were exchanged lusos an interest rate of 11.72 percent, almost half than three months ago, when exceeded 22 percent.
An even larger decline accumulate their obligations to two years, which increased from 21 to 8.41 percent in just one quarter.
This pressure relief in the markets has been a source of satisfaction to the Government Luso, conservative sign, which is optimistic about the possibility of re-issue long-term debt-that is, with a maturity exceeding two years from the second half of 2012, as provided for rescue.
This date has been questioned by rating agencies, analysts and investors, convinced that with the developments that show the interest obligations of Portugal in the secondary market and the progress of its economy, these emissions will seem intolerable.
The 78,000 million euros provided by the EU and the IMF has allowed Portugal to cover their long-term financial needs and has needed only auction in the last year short-term debt.
But the harsh and unpopular austerity measures Luso adjustment program have accelerated the deterioration of the economy with a recession than 3% and unemployment at 15.3%, which complicate their chances of growth and renewed confidence markets.
Category: Business News