Re: Portugal and the credit crisis
Posted: 07:55 Tue 10 Apr 2012
A place for those passionate about port, and for those new to it. We hold lots of Port tastings: please join us!
https://www.theportforum.com/
Would you care to summarise for those of us who don't speak Portuguese?jdaw1 wrote:Portugal sets restrictions on early retirement
The title is a fair summary.AHB wrote:Would you care to summarise for those of us who don't speak Portuguese?
The BBC, in an article entitled [url=http://www.bbc.co.uk/news/world-europe-17998937]Portugal scraps four public holidays in austerity drive[/url], wrote:Portugal has taken austerity measures to a new level with the decision to scrap four of its 14 public holidays.
Two religious festivals and two other public holidays will be suspended for five years from 2013.
The decision over which Catholic festivals to cut was negotiated with the Vatican.
Portugal has already cut public sector wages and raised taxes to reduce its budget deficit and deal with its economic crisis.
Swaps+3.3% is not bad at all, given what has gone before.The Financial Times, in an article dated 9th January 2014 and entitled [url=http://www.ft.com/cms/s/0/9b47af68-791a-11e3-b381-00144feabdc0.html]Portugal enjoys strong demand in debt sale[/url], wrote:Portugal issued €3.25bn of five-year debt on Thursday as a wave of positive sentiment towards the eurozone periphery lifted demand for the placement above €11bn.
The strong demand for Portugal’s debt follows a similar welcome for an offer of ten-year Irish government bonds on Tuesday and marks a successful beginning to Lisbon’s efforts to regain full market access before exiting its three-year bailout programme in June.
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Bankers close to the deal said orders worth €11.2bn were placed for the sale of Portuguese bonds, in which Lisbon had initially been expected to raise up to €3bn.
The price for the ‟syndicated tap” of an existing bond maturing in June 2019 was set at 330 basis points above mid-swaps, a European pricing benchmark, about 10bp lower than earlier official guidance, the bankers said.
I suspect that the Agência de Gestão da Tesouraria e da Dívida Pública would prefer that you don’t say that within the hearing of the investors.Miguel Simoes wrote:Still not sure how we'll repay that...
Thought they were all Germanjdaw1 wrote:I suspect that the Agência de Gestão da Tesouraria e da Dívida Pública would prefer that you don’t say that within the hearing of the investors.Miguel Simoes wrote:Still not sure how we'll repay that...
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/af60fd28-8280-11e3-9d7e-00144feab7de.html]Portugal bond yields below 5% for first time since August 2010[/url], wrote:Portugal’s 10-year bond yield has slumped below the 5 per cent mark for the first time since August 2010 as investors take heart from Ireland’s assured exit from its bailout programme and recent promotion to investment grade by Moody’s.
The yield of Portugal’s bond maturing in 2024 fell 11 basis points to 4.978 per cent, the lowest since the country began to get dragged into the eurozone crisis.
The drop in borrowing costs greatly improves Lisbon’s chances of funding itself independently and leaves its bailout programme on time later this year.
The Financial Times, in an article dated 28th March 2014 and entitled [url=http://www.ft.com/cms/s/0/e91c6172-b658-11e3-905b-00144feabdc0.html]Portugal bond yield falls below 4% for first time in four years[/url], wrote:Portugal’s benchmark borrowing costs have slipped below the 4 per cent mark, as investors rush to snap up some of the last remaining “yield” in the eurozone.
Portuguese 10-year bond yields, which move inversely to prices, have been flirting with the 4 per cent threshold for several days, but fell clearly below the level for the first time in four years on Friday, dipping 4 basis points to 3.987 per cent.
The move caps a remarkable turnround from the height of the eurozone crisis, when Portugal’s benchmark bond yield peaked at 17.4 per cent and the country had to be rescued by the International Monetary Fund and its European neighbours.
As recently as last summer, a political crisis sent the yield to 7.5 per cent and sparked concerns that Lisbon would be unable to fund itself in markets and exit its bailout programme on time later this year.
Very interesting comparison. Is the UK nearly as risky as Portugal (aside from Portugal's ability to produce spectacular wines)?Aside: whilst Greece is in terrible difficulties, Portugal’s 10-year bond yields a mere 2.71%. Compare to the 2% Sept 2025 gilt which yields 2.30%.
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/1d347120-0c83-11e6-b0f1-61f222853ff3.html]Canadian rating agency holds key to Portugal’s future[/url], wrote:A Canadian rating agency will decide on Friday whether to maintain or cut off life support to Portugal’s fragile economic recovery.
If DBRS downgrades Lisbon to below investment grade, as Fitch, Moody’s and Standard & Poor’s have already done, the country will automatically be excluded from the European Central Bank’s quantitative easing bond-buying programme, of which Portugal has been a leading beneficiary.
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Federico Santi, an analyst with the Eurasia Group risk consultancy, said: “The consensus is that DBRS won’t downgrade Portugal this Friday and a change in the outlook is also unlikely.”