Portuguese yields fall on stronger-than-expected debt swap

LONDON Tue Dec 3, 2013 6:32am EST

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LONDON Dec 3 (Reuters) - Portuguese government bond yields extended a fall on Tuesday as a debt exchange saw stronger demand than expected by some in the market.

Portugal on Tuesday swapped 6.6 billion euros in bonds expiring next year and in 2015 for longer maturities, alleviating its bond redemptions ahead of its planned exit from an EU/IMF bailout in mid-2014.

"It was a good auction. Quite surprising was the size. I don't know whether there was some foreign demand as well or only domestics, but either way this is ... encouraging," one trader said.

Five-year bond yields were down 18 basis points on the day at 4.93 percent, while 10-year yields were 9.8 bps lower at 5.87 percent.

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