Portugal placed 1180 million euros in Treasury Bonds at five to seven years at interest rates higher in both periods in relation to the previous auctions comparable.
According to the webpage of the Agency for the Management of Treasury and Public Debt (IGCP) on Bloomberg, the five years were placed 630 million euros in Treasury Bonds (OT), with a maturity of 17 October 2022, the interest rate of 2,753%, higher than that registered in November, when they were placed 700 million euros at a rate of 2.1%.
In OT for seven years, with maturity on February 15, 2024, the IGCP placed 550 million euros at an interest rate of 3,668%, also higher than at the previous auction of comparable, held in September 2016, when they were placed 500 million euros 2,817%.
Since the end of January that the rates have gone up, not only in Portugal but in the rest of Europe
The demand OT the five years, amounted to 946 million euros, 1.5 times higher than the amount placed, and the OT the seven years amounted to € 1111 million euros, 2,02 times greater than the amount placed.
According to Filipe Silva, director of asset management of Banco Carregosa, the rise in interest rates was not a surprise, because “since the end of January that the rates have gone up, not only in Portugal but in the rest of Europe, in a move justified by some signs of inflation, leading investors, especially in the longer time frames, to protect against a possible interest rate hike from the ECB this year or next”.
“The elections in France and the increase of the political risk in Italy have also contributed to the increase in overall rates of european sovereign debt,” said Filipe Silva, arguing that “the rates of emissions of today reflect this movement, but even so they were in line with what is to be done in the secondary market”.
“of Course [the interest rates] went up in the face of the latest emissions comparable. We had a demand very reasonable for an amount issued that was also within expectations. The operations went well,” concluded the responsible of the Banco Carregosa.
THE IGCP had announced for this Wednesday the completion of two auctions of OT, one to five years and another seven years, to raise between eur 1000 million and 1250 million euros.
In January, the agency headed by Cristina Casalinho has announced that it expects to issue between 14 billion to 16 billion euros in Treasury Bonds this year through emissions monthly.
In net terms, the Portuguese Republic needs a loan of 12500 million euros for this year, to a value that includes 2700 million euros of funds associated with the recapitalisation of Caixa Geral de Depósitos (CGD), which are already funded.
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