LISBON: Portugal sold all 2.5 billion euros of Treasury bills on offer on Wednesday and yields fell sharply in the first debt auction of 2013, when the bailed out country is expected to stage a return to the longer-term bond market.
The IGCP debt agency said the average yield on 18-month T-bills fell to 1.963 percent from 2.990 percent in the previous auction in late November.
It sold 1 billion euros of the 18-month issue.
One-year T-bills yielded 1.609 percent, down from 2.101 percent at the previous auction in October and the average yield on the three-month paper dropped to just 0.667 percent from 1.936 percent in November. The IGCP sold 300 million euros of 3-month bills and 1.2 billion euros of 12-month bills.
Demand outstripped the amount placed by 2.7 times on 18-month bills, 2.3 times on 12-month bills and 3.8 times on the shortest maturity, the IGCP said.
Portugal started issuing longer, 18-month T-bills last year and then swapped shorter-dated for longer bonds on Oct. 3 as part of its plan to stage a gradual return to debt markets. Its current 78-billion euro bailout programme covers the country's financing needs up until September 2013.
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