Portugal’s borrowing costs increased as the government sold 850 million euros ($1.15 billion) of 12-month bills.
The securities due in July 2015 were issued at an average yield of 0.453 percent, the country’s debt agency said. That compares with an average yield of 0.364 percent at a previous auction on June 18, which was the lowest rate for comparable-maturity debt since Bloomberg began compiling the data in March 2005. The auction attracted bids for 2.05 times the amount allotted, compared with 1.32 times in June.
The debt agency also sold 400 million euros of six-month bills due in January 2015 at an average yield of 0.243 percent, attracting bids for 2.46 times the amount offered. That compares with an average yield of 0.438 percent at a previous auction of six-month bills on March 19 with a bid-to-cover ratio of 4.6.
Today’s sale was Portugal’s first debt auction since markets were roiled on July 10 after a parent company of Portuguese lender Banco Espirito Santo SA missed some payments on commercial paper. Portugal’s 10-year (GSPT10YR) bond yield jumped to more than 4 percent on that day.
The two-year note yield fell 7 basis points, or 0.07 percentage point, to 0.95 percent at 1:17 p.m. London time. The 10-year bond yield dropped 8 basis points to 3.74 percent. Portugal is rated below investment grade by Fitch Ratings, Moody’s Investors Service and Standard & Poor’s.
The IGCP, as the debt agency is known, on June 13 said that the total indicative amount for today’s auctions was between 1 billion euros and 1.25 billion euros. On July 2 Portugal raised $4.5 billion in its first dollar bond sale in four years. It plans to hold one or two bond auctions in the third quarter.
Portugal built up a cash buffer before the end of its European Union-led aid program in May, and the debt agency ended 2013 with what it calls a treasury cash position of 15.3 billion euros. Portugal aims to raise financing to cover “around two-thirds” of its 2015 funding needs by the end of this year, Secretary of State for Treasury Isabel Castelo Branco said in an interview on May 19.