Portugal buys back bonds preparing for bailout exit

Portugal has bought back 1.23 billion euros of its government bonds that were due to mature later this year and next.

The move is intended to reduce Lisbon’s debt repayments ahead of the end of its international bailout programme in May.

The amount of interest that Portugal is having to pay to investors to persuade them to buy its bonds has fallen sharply this year to levels last seen in 2010 – before the EU/IMF bailout.

Confidence has grown that the country can return to financing itself in bond markets as growth resumes after the worst slump since the 1970s.

Buying back maturing debt should help the country ease any concerns investors may have that Portugal might struggle to meet bond redemptions after it exits its bailout programme.

The country has already met all its financing needs for this year with the help of two bond issues, and the finance minister has said Lisbon is now preparing to pre-finance its needs for 2015.