Portugal sees high demand, lower cost in debt sale

Debt-stressed Portugal raised euro750 million ($1 billion) in a Treasury bill sale on Wednesday, with a lower interest rate and high demand reflecting an easing in tension about the country’s financial woes. The results boosted market confidence, even though many analysts expect Portugal to eventually seek a bailout, like Greece and Ireland, despite the government’s insistence it doesn’t need help. The debt agency said the yield on the 12-month bills was 4.03 percent, down sharply from 5.28 percent on the same bills last month. Demand was three times the amount on offer. The country has experienced no difficulty raising money so far, despite concern about its debt load and meager growth. Portugal needs to raise up to euro20 billion from financial markets this year. The fall in the cost of Portugal’s funding was more good news for the minority government, which is scrambling to get the country’s finances back on an even keel amid nervousness about the wider eurozone’s fiscal soundness. The Secretary of State for the Treasury, Carlos Costa Pina, said the sale demonstrated that Portugal’s efforts are paying off.