Portugal’s borrowing costs fell at a sale of 1.5 billion euros ($1.9 billion) of 12- and six-month bills that allowed the country to reach its issuance target for the first quarter.
The securities due in June 2013 were issued at an average yield of 3.834 percent, the country’s debt management agency said. That compares with 3.908 percent at the previous auction of 12-month bills on May 2. The sale attracted bids for 2.7 times the amount offered, the same as in May.
The debt agency also sold 500 million euros of six-month bills due in December 2012 to yield 2.653 percent, attracting bids for 4.3 times the amount offered. That compares with 2.935 percent on May 2, when the bid-to-cover ratio was 4.1.
The debt agency sold the maximum set for the auction, bringing total first-quarter issuance to 4.5 billion euros, matching a goal it announced in March. There are no further sales set for this month.
Portugal is cutting spending and increasing taxes to comply with the terms of the 78 billion-euro aid plan requested last year from the European Union and the International Monetary Fund. Prime Minister Pedro Passos Coelho said March 5 that if the country can’t tap bond markets to sell longer-maturity debt by September 2013 because of “external reasons,” it would be able to count on continued support from the IMF and the EU.
Portugal’s two-year note yield dropped 56 basis points to 10.41 percent as of 11:28 a.m. in London. Ten-year-bond yields also declined, falling 16 basis points to 11.82 percent.
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