LISBON, Sept 9 Portugal's planned injection of
2.7 billion euros into ailing state-owned bank CGD will not
change the 2016 debt issuance plan as it can be financed with
money earmarked for early repayments to the International
Monetary Fund, the government said.
On Aug. 23, the European Commission and Portugal agreed in
principle on the recapitalisation of the country's largest
lender, envisaging up to 2.7 billion euros ($3 billion) in state
funds and nearly as much in debt and equity.
"This capital injection will not change the public debt
issuance plan set by the government," Treasury Secretary Ricardo
Mourinho Felix told parliament late on Thursday.
He would not say where the money would come from, but the
finance ministry said on Friday that forgoing on some planned
early reimbursements of bailout funds to the IMF would allow
Lisbon to foot the CGD bill.
The IMF provided about one-third of the joint EU/IMF 78
billion euro bailout that Portugal received during a debt crisis
in 2011. The IMF's part carries higher interest payments than
the EU chunk and current market rates and the country has been
paying back the costlier debt early by issuing bonds.
In a presentation to investors on Sept. 5, the state debt
agency IGCP said it had 4 billion euros in planned repayments to
the IMF to be carried out this year after 2 billion already paid
back in February.
After last year's early reimbursements of 8.4 billion euros
of IMF loans Lisbon has now paid back 36 percent of bailout
funds to the Fund.
The government's medium- and long-term debt issuance plan
for this year was set at around 20 billion euros. It has already
issued 14.6 billion euros in government bonds and Medium Term
Notes and seeks to place at least 2.9 billion by year-end.
The IGCP has also raised a higher-than-expected 2.5 billion
euros in retail debt this year.
(Reporting By Sergio Goncalves and Andrei Khalip; Editing by