Portugal and Italy go long

摘要

The rating of one is firmly in junk territory while that of the other is at the lower end of the investment-grade spectrum, but that did not stop investors from rushing in to buy long-term debt issued by both portugal and italy last week, at a time when German 30-year Bunds are trading at yields of around 1.1%. The two peripheral eurozone countries shrugged off concerns about the single currency bloc to raise €8.5bn between them last week from the issuance of 30-year bonds, helped by some investors that returned to Portuguese bonds for the first time since the 2008 financial crisis. Both countries have had their troubles in recent years. Portugal (Ba1/BB/BB+) is one of only three eurozone countries with a junk rating, while just last month Italy (Baa2/BBB-/ BBB+) was downgraded to the very edge of investment grade by Standard & Poor's on its weak growth prospects and high public debt.