Portugal raises $3.9 billion in debt auction

(AP)? LISBON, Portugal ? Bailed-out Portugal managed to raise euro3 billion ($3.9 billion) in a debt auction Wednesday despite concerns that a deepening recession could force it to ask for more international financial help.

Portugal has enacted broad spending cuts to reduce its massive debt load, but after a double-dip recession in 2011, the government is forecasting a further 3 percent contraction this year.

The downturn could leave Portugal short of funds, meaning its European partners and the International Monetary Fund may have to find more money on top of the euro78 billion ($103 billion) they lent to the country last year to escape bankruptcy.

European officials, keen to avoid another eurozone country joining Greece in needing a second bailout, and have praised Portugal's commitment to austerity. All three major political parties have given their blessing to the debt-reduction program.

Inspectors from the bailout lenders were due in Lisbon on Wednesday to determine whether Portugal is honoring its agreement to cut spending and enact economic reforms in return for the financial rescue. The evaluation is expected to take about two weeks.

They arrive just as the Portuguese government debt agency said interest rates in the sale of 3-, 6- and 12-month Treasury bills were below 5 percent ? viewed as a manageable level. Demand was also fairly strong.

Though the Treasury doesn't need the money because Portugal's financing needs are covered by the bailout until next year, it wants to maintain a presence in the markets to test investor sentiment. It's aiming to raise euro17.4 billion in short-term bills this year.

The interest rates at debt auctions have ticked lower in recent months, making the government hopeful it will be able to sell longer-term debt next year, and from then on get by without further help.

However, the recession and a jobless rate that has climbed to a record 13.6 percent have cast a pall over its efforts.

The debt agency said it sold euro300 million in 3-month bills at a rate of 3.845 percent, down from 4.068 percent two weeks ago and 4.346 percent in November.

It sold euro1.2 billion in 6-month debt at 4.332 percent ? lower than the 4.463 percent two weeks ago and the 4.75 percent last month.

The 12-month debt went for 4.943 percent. A sale of 11-month bills last month saw a rate of 4.986 percent.

Demand was more than 10 times higher than the amount offered in 3-month debt and more than double for the two longer bills.

"The overall trend in these operations is that Portugal's level of risk is dropping," said Filipe Silva, debt manager at Portuguese financial group Banco Carregosa.

Source: http://feeds.cbsnews.com/~r/CBSNewsGamecore/~3/lNaac56SuPw/

weta rudolph the red nosed reindeer rudolph the red nosed reindeer adam carolla desean jackson rick neuheisel rick neuheisel