This Wednesday, the IGCP successfully concluded the issuance of bonds maturing in 2027 and 2034. As had already happened at the February auction, the Treasury again paid more than 1% to issue longer-term debt, due to the rise in market interest rates in 2022.
The Treasury placed 500 million euros in bonds maturing in 2034, after paying a commission of 1.154%. In February, IGCP had already paid more than 1% (1.008%) to place 9-year bonds. In this trade, the demand exceeded the value of the supply by 1.58 times.
In the line that matures in 2027, IGCP issued an additional €500 million, at a cost of 0.217%. Demand for this issue more than doubled the amount of supply (2.04 times), according to data published by the Bloomberg agency.
Although interest rates are trading above values presented in 2021, yields have fallen in recent days as investors seek refuge in debt. The 12-year yield was trading at 1.126%, while just a month ago the Portuguese Republic’s 10-year interest rate hit 1.18%.
“European sovereign debt rates have been on an upward trend since the start of the year, implying higher risk premiums for the various issuers. The current conflicts between Russia and Ukraine have reversed, at least in the short term, this trend, which ended up allowing today’s auction to end with lower rates for Portugal”, explains Filipe Silva.
According to the investment director of Banco Carregosa, “the next meeting of the European Central Bank is expected to understand what measures will be adopted, at a time when we are struggling with high inflation and a conflict at the doorstep of Europe, which directly or indirectly end up affecting all geographies”.
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