Portugal pays slightly increased rate in bond auction

Portugal raised 722 million euros ($961.8 million) on Wednesday in short-term loans at slightly increased yield rates, Portugal’s debt management agency said.

Despite heightened tensions over the eurozone debt crisis, the rate of return to investors on three-month notes rose only slightly to 4.972 percent, from 4.931 percent in the previous auction on September 21.

The 722 million euros was at the higher end of the 500-700 million euros that Portugal had sought to raise, and bids doubled supply compared to cover of 1.7 times in the previous auction.

The auction was held a day after Standard and Poor’s confirmed its BBB- rating for Portugal, just above speculative grade, although it kept Lisbon on watch for a downgrade.

S&P warned of a deeper-than-expected recession in Portugal and there were risks to its implementation of the tough adjustment programme it agreed with in order to receive a 78-billion-euro bailout deal with the EU and IMF in May.

— Dow Jones Newswires contributed to this report —