* Portugal tours Germany, France and London in busy week
* Investors say country ready to issue 10yr, new bond likely
By John Geddie
LONDON, March 22 (IFR) - While the Cyprus bailout has hogged
the limelight this week, Portugal took the opportunity to remind
investors that it is doing its damnedest to make its own way in
the capital markets.
The country, rated Ba3/BB/BB+, embarked on its most
extensive European roadshow since it entered an EU/IMF bailout
programme in mid 2011, meeting investors in Germany, France and
Europe's financial hub London.
Having successfully returned to the market with a EUR2.5bn
tap of its five-year bond in January, the debt agency has since
indicated it plans to issue 10-year debt.
Last week Ireland obtained EUR12bn booksize for a EUR5bn
10-year bond, the first benchmark from the sovereign since its
"Without Cyprus, they would have issued new debt
this week," said one investor present at the meetings.
"Now they will probably wait one or two weeks, until after
the Easter break."
First and foremost in the mind of the Portuguese funding
officials is to demonstrate market access, which ultimately
could trigger the European Central Bank's bond-buying scheme.
"This additional liquidity will help push down yields for
Portugal, and private sector issuers in the country," said the
TO TAP OR NOT TO TAP
Speaking to IFR last month, Portuguese debt agency chief
Joao Moreira Rato said further debt issuance in 2013 would
likely be through taps of existing euro bonds, to hit its
planned EUR5bn of bond issuance.
However, market participants believe there is a high
probability that Portugal will issue a new bond, as new eurozone
rules require 55% of monies raised each year to have Collective
Action Clauses (CACs), and these are not written into its
The new deal is likely to be EUR2-3bn in size, added the
One banker close to discussions urged Portugal not to
underestimate the importance of taking size out of the market,
when opportunities present themselves.
Portugal has a manageable EUR5.8bn of redemptions coming up
in September this year, but this is followed by a hefty
EUR13.8bn due in 2014 and EUR13.4bn in 2015.
With this in mind, Portugal may see this week as an
opportunity lost, especially as its bond yields proved fairly
resilient to the negative headlines coming out of Cyprus.
Apart from an initial knee-jerk reaction that saw Portugal's
10yr yields hit 6.30% at Monday's open, up from 6.0% at the
close of play on Friday March 15, the country has actually seen
some performance throughout this week with yields back to 5.95%
(Reporting by John Geddie, editing by Andy Perrin and; Alex