Portugal’s Borrowing Costs Fall at Auction of 10-Year Bonds

Portugal’s borrowing costs fell at an auction of 550 million euros ($613 million) of 10-year securities.

The bonds due in July 2026 were issued at a yield of 3.027 percent and the auction attracted bids for 1.72 times the amount allotted, the country’s debt agency said. That compares with a yield of 3.093 percent at an auction of 10-year bonds on July 13, with a bid-to-cover ratio of 1.49.

Portugal also sold 450 million euros of bonds due in April 2021 at a yield of 1.87 percent. That’s higher than the yield of 1.843 percent at a previous auction of five-year bonds on June 8. The debt agency on Aug. 26 said the total indicative amount for Wednesday’s auctions was between 750 million euros and 1 billion euros.

The country’ credit rating was retained at investment grade by DBRS Ltd. in April, securing eligibility of Portuguese government debt for the European Central Bank’s bond purchase program. DBRS is due to review Portugal’s rating again on Oct. 21. Portugal’s 2017 budget proposal is also due in October.

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