MNI INTERVIEW: No Plans For Portuguese FX Bonds-Debt Chief

Portugal's debt management agency has no short-term plans to sell foreign currency bonds, its president Cristina Casalinho told MNI in an emailed interview, although it still needs to raise EUR5.2 billion to meet the Treasury's funding needs in a "unique" year which has seen twice as many syndications as usual.

Issuance of foreign currency-denominated debt "is not in IGCP, E.P.E.'s immediate plans," Casalinha said. "Still, last year, Portugal launched its first RMB denominated bond."

Despite the operational challenges presented by lockdown measures taken in response to the Covid-19 pandemic, she pointed to three "very successful" syndications, "while typically Portugal only does 1.5 syndications per year."

The prompt fiscal and monetary policy response of local and EU authorities at the onset of the outbreak was "key" for the stabilisation of capital markets, Casalinha said in an emailed response to questions. "Portugal, as other European sovereign issuers, has benefitted from these coordinated actions."

Up to Sept. 10, Agencia de Gestao da Tesouraria e da Divida Publica had already issued EUR25.6 billion of bonds and EUR13 billion of bills. Over the rest of the year, some EUR3.4 billion is expected to be met through government bond (PGB) issuance, in addition to net issuance of EUR1.8 billion in Treasury Bills.

Some EUR1.5-1.75 billion in additional bill sales should come in an auction of March 2021 and September 2021 paper set for Sept. 16.

IGCP, E.P.E. also plans to raise EUR1.1 billion via a domestically-targeted floating rate note (FRN) and retail products, Casalinho said.

Portugal currently has no duration target, she added, though she noted that the weighted average maturity of the public debt stock has been relatively stable, at between 7.5-8 years.

The government is expected to announce initial spending plans for 2021 on Oct. 10, after which IGCP, E.P.E. will be in a position to project 2021 issuance, she said.