Portugal finances itself with 1,500 million in BT with a new negative record in 6 months – Bonds

Portugal on Wednesday returned to short-term debt auctions, having put a total of 1,500 million euros in debt for six months and 12 months. Despite rising interest rates in the bond markets, the Treasury managed to place bonds with the shortest maturity, at 6 months, with a new record for negative interest rates.

The Treasury and Public Debt Management Agency – IGCP – issued a €495 million bond maturing in July 2022, at a negative interest rate of -0.596%, an unprecedented value in a six-month bond issue. According to Bloomberg data, demand was 2.76 times the supply.

In securities with a maturity of 12 months, the Treasury funded itself with 1,005 million euros, at a rate of -0.574%, slightly higher than -0.594% applied in last year’s version, implemented in July 2021. Supply exceeds demand by 1.67 times.Thus Portugal was able to set the maximum intended value – the indicative amount for the operation was between 1250 and 1500 million euros – with negative interest, despite the movement of increasing interest on bonds that marked the beginning of the year.

“The disparity in the rates of short-term debt was not significant, the last similar auction was held in July 2021 for a period of 12 months, and in light of this, we see a price increase from -0.594% to -0.574% already. In 6 months, the rate was set at -0.596%,” Philip Silva highlights, in the first comment on the double auction of Treasury Bills (BT).

About Banco Carregosa Investment ManagerCentral banks have come under some pressure, due to factors such as inflation, supply chain disruptions and high energy prices, which are the factors that prompted them to initiate the first adjustments to their monetary policies. .

“The stimulus buying plans are starting to be withdrawn and the market is expecting that we will start to see increases in the reference prices, a movement that is already showing in the medium and long-term prices but still not affecting the short-term prices. It is very important, especially for Portugal, to be able To continue to benefit from the current scenario of low interest rates, in order to be able to be satisfied with the high level of indebtedness”, adds Felipe Silva.

Portugal maintains negative interest rates for up to 5 years. The 10-year reference rate continues to trade above 0.6%.

(News updated with more information)