(Adds details, comments)
LISBON, April 23 Portugal easily sold 750
million euros ($1 billion) of 10-year debt on Wednesday in its
first bond auction in three years, in a show of support from
investors that puts the country on track to exit its bailout
smoothly next month.
The IGCP debt agency placed the bond at an average yield of
3.5752 percent, the lowest on record in an auction of that
Wednesday's figure was significantly lower than the
secondary market yield of 3.68 percent registered just before
the auction and well below the 5.112 percent that Portugal paid
in a syndicated 10-year bond sale in February. Demand
outstripped the amount placed by 3.5 times.
"It's now proven that Portugal can finance itself in the
tough and rough normal market without support from banks," said
Filipe Silva, head of debt at Banco Carregosa in Porto.
"The yield below the secondary market is very important as
it shows that investors do not demand a premium for holding
The debt sale, intended to help pre-fund Portugal for 2015,
occurred a day after its international lenders started their
final evaluation of its performance under the 78-billion-euro
bailout it took in 2011.
It suggests that Portugal, whose benchmark yields are
trading at eight-year lows, has an increasingly good chance of
making a clean exit from the rescue package.
That means it would follow in the footsteps of Ireland,
which chose not to request a precautionary European loan when
its bailout ended in December.
"The result means that Portugal will probably be able to go
it alone, which is nothing short of shocking considering where
Portugal was just 10 month ago," said Nicholas Spiro, managing
director at Spiro Sovereign Strategy consultants in London.
Ireland sold 10-year debt at 2.967 percent in its first
regular post-bailout bond auction last month.
Portuguese debt yields in the secondary market are close to
where Irish yields were about a month before the end of Dublin's
($1 = 0.7248 Euros)
(Reporting By Andrei Khalip, Sergio Goncalves and Daniel
Alvarenga; Editing by John Stonestreet)