Portugal Sells 18-Month Bills, Longest Maturity in a Year

Portugal sold 1 billion euros ($1.3billion) of 18-month bills, the longest debt maturity auctionedsince the country requested a bailout from the European Unionand the International Monetary Fund last year.

The securities due in October 2013 were issued at anaverage yield of 4.537 percent and attracted bids for 2.6 timesthe amount offered, the country’s debt management agency said.The bills are the longest maturity Portugal has sold sinceMarch, 9, 2011, when the agency sold bonds due in September 2013at an average yield of 5.993 percent.

The government approved on Feb. 9 a change to the maximummaturity allowed for new issues of treasury bills, extending itto as much as 18 months. The country’s aid plan was requested inApril 2011 and assumes Portugal will regain access to mediumand long-term sovereign-debt markets in 2013.

Portugal’s two-year note yield was little changed at 9.98percent as of 11:28 a.m. in London. Ten-year bond yields were at11.88 percent.

Borrowing costs declined at a sale of six-month billstoday. The debt agency sold 500 million euros of bills due inOctober 2012 at an average yield of 2.9 percent, attracting bidsfor 5 times the amount offered. that compares with an averageyield of 4.332 percent and a bid-to-cover ratio of 2.5 at a Feb.15 auction.

The IGCP, as the agency is known, said on March 29 that thetotal indicative amount for today’s auctions was between 1.25billion euros and 1.5 billion euros.

Portugal plans to sell as much as 4.5 billion euros ofbills in the second quarter. it sold 10 billion euros of billsin the first quarter, more than the 6.5 billion euros planned.

The European Central Bank approved in February thetemporary use of additional collateral in funding operations byseven euro-area members’ central banks including Portugal. Itoffered loans of up to three years against eligible collateralon Feb. 28 that can be used to finance purchases of assetsincluding higher-yielding government debt.

To contact the reporters on this story:Joao Lima in Lisbon at ;Anabela Reis in Lisbon at

To contact the editor responsible for this story:Tim Quinson at