Portugal achieves record bond sale ahead of bailout exit
Portugal quickly distributed 750 million euros worth and has held its first market of government securities in 3 years.
The ties – that are due to mature in ten years time – were provided in the lowest rate of interest since prior to the financial crisis which brought the nation towards the verge of bankruptcy.
The positive feeling was resembled by bond broker João Queirós with Banco Carregosa within the financial markets.
He explained: “Because of all of the questions there has been, and also the progress that people have created during the last 3 or 4 years; due to the questions associated with development, and also the quantity of public debt Portugal has and our ability to respect our commitments to lenders, we think about this rate of interest – 3.57 percent – to be very interesting.”
As recently as February, Portugal settled 5.112 percentage in a syndicated 10-year bond sales as well as in 2012 the yield peaked at more than 17 percent.
The bond sale came as Portugal’s overseas lenders – the so-called troika of the European Union, European Central Bank – and International Monetary Fund performed their last assessment of its compliance with all the conditions of the bailout program.
The strong interest in the securities can be a key confidence indicator, but Portugal’s Prime Minister Pedro Passos Coelho was cautious when asked if his government might decide to abandon the recovery program with no backstop of the standby European Union mortgage.
He joked – creating a mention of his name which partially means rabbit in Colonial – that there’s a proverb “You shouldn’t skin a rabbit before you capture it” and he didn’t desire to be captured before confirming Portugal had finished all of the steps within the bailout program towards the troika’s fulfillment. So he explained he’d just talk about how they’d leave the bailout if the troika had finished its final analysis.
Wednesday’s auction of government securities was meant to help raise enough money for Portugal to satisfy its requirements for next year.
Demand was driven by signals the eurozone crisis is abating and Portugal is time for economic development following a brutal downturn.
Portugal has made atleast a large area of the part, considering 2 or 3 years before it had been considered virtually insolvent,” said Michiel de Bruin, head of worldwide prices at F&C, an asset manager which keeps Portuguese connection
The country’s economy contracted by 1.4 percent in 2013. The Bank of Portugal as well as the government have both expected GDP will increase by 1.2 percent this season and 1.4 or 1.5 percent in 2015.