Portugal's largest builder, Mota-Engil sold 175 million euros ($227.16 million) of three-year bonds targeted at retail investors. It joins a growing number of corporates returning to the bond market to raise funds as Portugal's debt crisis slowly subsides.
NYSE Euronext Lisbon bourse's Markets Director Miguel Geraldes said on Thursday demand for the bonds, which pay an interest rate of 6.85 percent, exceeded the offer amount by four times, allowing Mota to double the issue size. Mota-Engil has said it will use proceeds from the bond to extend the average maturity of its debt as it prepares for a planned expansion outside recession-hit Portugal. Large Portuguese companies starved of loans from banks due to the sovereign debt crisis have started selling bonds to institutional and retail investors, often at lower interest rates than offered by their traditional lenders.
Besides Mota-Engil, Portugal Telecom, power utility EDP, Zon Multimedia, and Sonae group have all issued retail bonds in the past few months. Lisbon is working to repair its public finances and regain full access to debt markets as it targets an exit by mid-2014 from its 78 billion euro EU/IMF bailout, agreed in 2011.
The government hopes lower bond yields and Lisbon's return to the bond market in late January for the first time since the rescue will make it easier for banks and companies to borrow and help the economy out of its worst recession since the 1970s.
Comments
Comments are closed.