Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Portugal’s Borrowing Costs Rise at 12-Month Bill Sale

July 21 (Bloomberg) -- Portugal’s borrowing costs rose at an auction of 1.253 billion euros ($1.61 billion) of 12-month bills after yields surged in April and May amid Europe’s debt crisis.

The securities due July 21, 2011 were issued at an average yield of 2.452 percent, the country’s debt management agency said today in Lisbon. That compares with an average yield of 1.036 percent at a March 17 auction of 12-month bills.

“It was a pretty reasonable auction,” said Huw Worthington, a fixed-income strategist at Barclays Capital in London. Costs are higher but it’s “not an unsustainable level to pay for its debt.”

Moody’s Investors Service cut Portugal’s credit rating two levels this month, citing prospects for weak economic growth and growing debt. The government has raised taxes and cut spending in an attempt to rein in a budget deficit of 9.3 percent of output last year. The Finance Ministry on July 2 said that it aims to narrow the shortfall a year earlier than previously planned and meet the European Union’s 3 percent limit in 2012.

Borrowing costs among the euro-region’s high-deficit nations have dropped from peaks in May after the EU devised a 440 billion-euro financial backstop in return for government-austerity measures.

Today’s auction attracted bids for 1.3 times the amount offered, compared with a bid-to-cover ratio of 3.2 in the March auction. The IGCP, as the debt agency is known, on July 15 said the indicative amount for today’s auction was 1.25 billion euros.

To contact the reporter on this story: Anabela Reis in Lisbon at areis1@bloomberg.net.

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.