Portugal Pays Much Higher Interest Rate

January 5th, 2011
in News, Banking

The New York Times:   Portugal on Wednesday became the first of the troubled euro-zone members to tap the bond market in 2011 — and had its borrowing costs jump yet again — while the European Union began issuing bonds to finance its rescue fund for Ireland.

Follow up:

The Portuguese Treasury and Government Debt Agency easily sold €500 million, or $658 million, of six-month bills, with demand at 2.6 times the amount offered, up from 2.4 times in September, when it last sold similar debt.

But perceptions about the fragility of Portugal’s finances led investors to demand a higher interest rate to hold the securities: The bills carried an average yield of 3.69 percent, far above the 2.05 percent Portugal paid for a similar issue in September. Early last year, the rate was below 0.6 percent.  Read more at The NY Times......

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