Portugal advances with syndicated sale of 20-year debt – Obligations
Portugal will debut this year in the markets with a syndicated sale of 20-year Treasury (OT) trading. The Treasury and Public Debt Management Agency – IG a banking syndicate to operate already with an operation, which will arrive in the next few days, according to Bloomberg.
The mandatory IGCP BNP Paribas, Credit Agricole CIB, Morgan Stanley, JP Morgan, Nomura and NovoBanco as joint lead managers for the issue of OT with maturity in April 2042. The date for the direct placement with international investors.
In recent years, the Treasury and Public Debt Management Agency – IGCP chose to start the year with a syndicated sale, that is, an operation in which there is a syndicate of banks that guarantees the taking. The cost is higher, but it allows the country to guarantee upfront a greater part of the funding needed for the year. This was not the case in 2021, when the agency led by Cristina Casalinho started the year with smaller auctions, but would later recover from this type of operation.
Now it will do so again, as was the expectation of the analysts consulted by Negócios. Demand should not be a problem for the country, although it is likely that the “venhads” will rise compared to previous positions, in line with a worsening trend experienced in the market.
Portugal even financed itself for 10 years with negative interest rates, as a result of the recovery of market confidence in the country after the sovereign debt crisis, but mainly thanks to the European Central Bank’s (ECB) debt purchase mega-programmes. In 2021, the average cost of financing new debt was 0.6% (in 2020 it had been 0.5%), which is far below the peak of 5.8% in 2011.
The downward trend in oath rates in the primary and secondary markets was widespread across the eurozone, but is now starting to reverse. Central banks around the world are bouncing back on support as the pandemic eases and several are on a number of benchmark rate hikes. This is the case of the Bank of England and the Federal Reserve of the United States, for example.