Portugal’s public debt management office, the Agency of the Treasury and Public Debt, repurchased €886 million in sovereign bonds on Monday, bringing the total buybacks for December to €4.5Bn or 1.4% of GDP.
Governments buy back sovereign bonds for financial efficiency to refinance expensive debt at lower rates to save interest, to manage debt structure by swapping long-term for short-term debt, boosting market liquidity for older bonds, and to support market confidence.
The bonds in question would have matured in 2026 and 2027. Taking into account a repurchase made on December 17, and the early payback of the MEEF on December 22, Portugal has now paid off around €4.5Bn of public debt this month alone.
“In a context of surplus treasury and State liquidity at the end of the year, and the intention to soften the payout profile for the next two years at a favorable cost, the IGCP bought back sovereign bonds from the market worth €886 million on December 29″, says a statement from the Ministry of Finances.
“This operation is added to the buyback of treasury bonds on December 17 at over €1Bn, and the early payback of debt from the European Mechanism of Financial Stability (MEEF) on December 22 of €2.5Bn”, states the communiqué.
According to the same communiqué, through these operations “the Portuguese Republic was able to pay off early around €4.5Bn of public debt worth 1.4% of GDP.
SOURCE: ECO