IGCP Banks €1.078 Billion in Twin Treasury-Bond Auction on 10 June — 3.342% Yield on the 2035 Nine-Year Line, 3.894% on the 2045 Eighteen-Year Issue Inside the €13 Billion Annual Funding Programme

The Agência de Gestão da Tesouraria e da Dívida Pública (IGCP, Treasury and Public Debt Management Agency) placed €1.078 billion in Portuguese sovereign paper on Wednesday 10 June, the result of two parallel Obrigações do Tesouro (OT, Treasury Bond) auctions opened at 10:30 a.m. and settled by 11:45.

The first leg, the OT maturing 12 October 2035, was placed at an average yield of 3.342% — a nine-year line that had been trading at 3.32% on the secondary market the day before the auction. The second leg, the OT 4.1% 15 February 2045, cleared at 3.894% — an eighteen-year tenor priced at a small premium to the prior session’s 3.91% mid-market quote. The IGCP had announced last Thursday an indicative range of €1.0 to €1.25 billion across the twin operation; the €1.078 billion outcome lands toward the lower end of that band.

Two structural points stand out. First, demand-to-supply on Portuguese long paper has been running close to 2:1 across the IGCP’s 2026 auction programme — and Wednesday’s print did not depart materially from that pattern. Second, the 3.342% nine-year yield is roughly five basis points above the comparable 8 April auction (3.30% on a similar nine-year tenor), in a market where the German Bund equivalent has moved twelve basis points higher over the same period. That implies a quietly narrowing spread for Portugal — a structural compression that has accompanied investment-grade upgrades from S&P, Moody’s and Fitch over the past 18 months.

The auction adds €1.078 billion to a 2026 financing run that previously stood at roughly €6.995 billion across ten auctions, taking the year-to-date long-tenor print to about €8.073 billion. The IGCP’s published programme calls for roughly €13 billion of long-tenor financing across 2026, alongside a separate Bilhetes do Tesouro (BT, Treasury Bills) book that has settled €1.25 billion at sub-2% over the past month and a syndicated €3 billion twenty-year operation in late May.

The mechanics of the day were straightforward, but the macro frame is not. The European Central Bank’s Governing Council meets in Frankfurt on 11 June, and the three-month Euribor closed Tuesday at 2.373%, its highest reading since March 2025. Portugal’s IGCP is, in effect, taking out long-duration insurance against further rate steepening while spreads remain compressed against core euro paper.

The Ministério das Finanças (Ministry of Finance) has continued to forecast a 2026 budget excedente of 0.1% of GDP to Brussels, with a revision expected in the April 2027 Programa de Estabilidade (Stability Programme) update. Wednesday’s coupon yields will sit in the debt-service line of any revised projection — and a 3.342% nine-year coupon is materially below the 4.1% legacy paper the 2045 line replaces in any future buy-back, which is one reason the IGCP keeps active rolling auctions even as net financing needs slip below historical averages.