Portuguese bond yields hit 10-year high

Feb. 9, 2011 at 5:28 PM
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LISBON, Portugal, Feb. 9 (UPI) -- Portuguese debt went from buy to sell Wednesday, forcing yields to 10-year highs and renewing concern of a possible economic bailout, a rates strategist said.

"Once again we're back into this lull where they (EU policymakers) have promised something and they haven't given details. I think the market will become increasingly concerned about this, exactly as they did about packages for Greece and Ireland," said Rabobank rate strategist Richard McGuire, the Financial Times reported Wednesday.

An unnamed investor quoted by the Financial Times said Portugal had run out of buyers for its debt, which would put costs for the country "in danger of rising further and further."

At this point, international loans at about 6 percent would be cheaper than 10-year bonds after yields rose to 7.35 percent Wednesday as hedge funds began selling bonds.

The European Central Bank, the most significant supporter of Portuguese debt in recent months, has not bought any Portuguese bonds in two weeks, the Financial Times said.

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