The Portuguese government will issue two new types of bonds to exchange for previously issued bonds that are set to mature within the next two years, in order to reduce the government's debt pressure. The new bonds, which will mature in October 2017 with an interest rate of 4.677% and in June 2018 with an interest rate of 4.956%, will be used to swap for bonds maturing in June 2014, October 2014, and October 2015, respectively.
According to an analysis by the Portuguese newspaper Público, this bond swap is an important measure for the Portuguese government to strive to exit the international bailout program and fully return to the international market. Through this bond swap, the Portuguese government can not only alleviate the pressure of paying off maturing debt but also ensure that the country successfully secures financing over the next two years.
The analysis also points out that the Portuguese government may issue long-term bonds again in the first half of next year. Only if the issuance of long-term bonds is successful will Portugal be able to avoid a second bailout and exit the bailout program like Ireland. The analysis further states that it is highly likely that Portugal will exit the international aid agreement next year on the basis of applying for a precautionary standby loan.
Recently, the Portuguese economy has continuously shown positive signals, with economic growth achieved for two consecutive quarters, the unemployment rate falling for seven consecutive months, and the country's 10-year government bond yield remaining below 6%.
