[Portugal] was (…) forced to pay extremely high yields to sell five-year bonds as investors demanded big premiums amid the continuing worries over high debt levels in the eurozone.
It was forced to pay average yields of 4.657 per cent, almost 1 percentage point more than the 3.701 per cent paid at an auction at the end of May.
Steven Major, global head of fixed income research at HSBC, said: “These yields are approaching that magic number of 5 per cent that is likely to be charged by the European stability fund.
“If the yields keep going up at this rate, then they will be paying much more than 5 per cent next month, which is arguably unsustainable.”
Another banker agreed: “These yields are not sustainable. Portugal will have to access the emergency stability fund if they continue to rise at this rate.”