Lisbon raises 3.5 bn euros via bond sale

Portugal raised 3.5 billion euros ($4.73 billion) in 5-year bonds on Monday, attracting offers of more than twice that amount at rates in line with those on the market.

Global banking giant HSBC said there were bids of 7.5 billion euros made for the bonds which were sold at an effective rate of 6.45 percent, comparable with the 6.489 percent for the 5-year bond on the secondary market.

The finance ministry said the sale attracted “strong demand,” adding that the funds raised meant that Portugal, struggling to balance its public finances, has so far raised 30 percent of this year’s medium- and long-term funding requirements.

Portugal’s public debt agency sold the bonds via a banking syndicate led by Barclays Capital, BNP Paribas, Caixa-Banco de Investimento, Deutsche Bank, HSBC and Morgan Stanley.

This was Portugal’s first sale of bonds by bank syndicate — rather than open auction — since February 2010 and analysts said it could mark an important turning point in its efforts to raise fresh funds in the money markets.

Frederic Gabizon at HSBC France said investor attitudes to Portugal, once seen as the next candidate for an EU-IMF bailout after Greece and Ireland last year, had completely changed.