EURO GOVT-Portuguese 2-year yield rises to 10-month high

LONDON, March 4 (Reuters) – The Portuguese two-year
government bond yield rose to its highest levels since May on
Friday after Lisbon said it would sell two-year paper next week.

The yield (PT2YTY=TWEB: Quote, Profile, Research) was up 11 basis points on the day at
6.02 percent, widening the spread over two-year German bonds to
426 bps.

Portugal said it would offer up to 1 billion euros of
two-year bonds next week and analysts said the small size and
short maturity should help the sale.
“If they can get it away at these levels it may be
reassuring in the immediate term but the fact remains that
Portugal can’t sustain financing at these levels so a bailout
remains a question of when not if,” said Rabobank rate
strategist Richard McGuire.

The county’s last sale, a syndicated 5-year deal has traded
underwater since its launch. The bond was quoted at 97.38,
according to Reuters data, compared with an issue price of 99.76
(PTOTEPOE016=: Quote, Profile, Research).