Portugal?s two-year government bond yield fell 7 basis points to 8.71pc, after surging 75 basis points to a euro-era record of 8.78pc yesterday, topping the rate on the nation?s 10-year debt for the first time since 2006. The difference in yield that investors demand to hold Portugal?s 10-year bonds instead of German bunds reached a record of 510 basis points today.
The 10-year bond yield rose to 8.481pc, another euro-era record.
The June 5 election will fall between two bond redemptions on April 15 and June 15 that total ?9bn.
Portugal should still continue to finance itself in the market at present, Finance Minister Fernando Teixeira dos Santos said on March 16. ?It?s obvious that current market conditions are unsustainable in the medium to long term,? he said.
The ?implicit? average interest rate for Portugal?s government debt is 3.6pc and if yields in the market continue at these levels, Portugal will have an average interest rate of 4.9 to 5pc at the end of 2013, he said.
?This indicates that it?s possible for the country to face for some time these more costly conditions and so have some time to implement policies and to obtain results from those policies,? the minister said on that day.
The debt agency yesterday scheduled Treasury bill auctions for the second quarter, with two sales set for each of the three months.
The announcement suggests that Portugal intends to finance the debt repayment due in June ?via the issuance of bills and
other short-term debt,? ING?s Giansanti said.
Standard & Poor?s on March 29 downgraded Portugal for the second time in a week to BBB-, the lowest investment grade, saying the country will ?likely access? Europe?s rescue fund.
Portugal is rated lower than Ireland, which in November became the first to request aid from the European Financial Stability Facility, set up after Greece?s rescue in April 2010.
The country can meet ?debt redemption commitments scheduled for 2011, especially the redemptions of long-term debt that will take place in April and June,? Secretary of State for Treasury and Finance Carlos Costa Pina said earlier this week.
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