Portugal hired banks for its first issue of new bonds since the country asked for a bailout from the European Union two years ago, according to a person familiar with the matter.
Caixa-Banco de Investimento, Citigroup Inc., Credit Agricole SA, Goldman Sachs Group Inc., HSBC Holdings Plc and Societe Generale SA will arrange the planned sale of euro-denominated debt due February 2024, said the person, who asked not to be identified because they’re not authorized to speak about the transaction. The offering would be the country’s first sale of a new bond since a sale of 3.5 billion euros ($4.8 billion) of five-year notes in February 2011, two months before the country asked for a bailout, according to Societe Generale data.
Portugal is intending to sell the debt at a time when yields on country’s existing 10-year bonds fell to the lowest since 2010 as the decline of interest rates worldwide impels investors to seek higher-yielding securities. In January, Portugal sold a reopening of 2.5 billion euros of bonds via banks.
“It’s a further sign of normalization in the euro area sovereign bond market,” said Ciaran O’Hagan, head of European rates strategy at Societe Generale in Paris. “Investors have been actively seeking to add long-dated, high-yielding, duration.”
Officials from the European Union, the European Central Bank and the International Monetary Fund are preparing to analyze spending cuts announced by Prime Minister Pedro Passos Coelho on May 3, according to an e-mailed statement from the Finance Ministry.
About 80 percent of the 5.3 billion-euro deficit-trimming effort in the 2013 budget comes from revenue gains, including 3.7 billion euros of tax increases.
Portugal requested a bailout from the EU and the IMF in April 2011 after a surge in debt and borrowing costs. A Lisbon-based official at Portugal’s Finance Ministry, who asked not to be named citing the office’s policy, confirmed the banks had
Anabela Reis in Lisbon at email@example.com