January 10, 2017 / 12:57 PM / a year ago

UPDATE 1-Portugal net borrowing to reach 12.4 bln euros in 2017 - IGCP

(Updates with details throughout)

LISBON, Jan 10 (Reuters) - Portugal’s IGCP debt agency said on Tuesday it would issue between 14 and 16 billion euros of treasury bonds in 2017 and the country’s net borrowing needs would reach 12.4 billion euros ($13.11 billion).

In the country’s financing programme for 2017, IGCP said the figure for net borrowing this year includes the 2.7 billion euros the government has already pre-funded to capitalise state-owned bank Caixa Geral de Depositos this year.

“The financing strategy for 2017 will be focused on the Portuguese government bonds curve with regular issuance of government bonds to promote liquidity and the efficient functioning of the primary and secondary market,” the agency said.

“Opportunities to perform bond exchanges and buyback will be further explored,” it added.

Portuguese bond yields have risen sharply in the past few weeks, partly on concerns the European Central Bank may soon reach the limit it can purchase of Portuguese debt under its asset-purchasing programme. The government hopes yields will decline on the back of improving economic fundamentals.

IGCP made no mention in the statement of a syndicated bond issue, which some market observers expect to be launched as soon as this week.

But it said that its gross issuance amount of government bonds will be met through a combination of auctions and syndicated issues. Bond auctions will be held on the second, fourth or fifth Wednesday of every month.

It said it will issue debt under its euro medium term notes programme “depending on market opportunities that suit the overall financing strategy”.

The IGCP said issuance of treasury bills will have no impact on net financing this year and it will hold bill auctions on the third Wednesday of each month. In the first quarter, treasury bill auctions will be held on Jan. 17, Feb. 17 and March 17. ($1 = 0.9462 euros) (Reporting By Axel Bugge; Editing by Andrew Heavens)

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