Lisbon has raised long-term funds in a canny debt swap and now plans to issue new debt, mimicking a similar move by Ireland. Investors’ willingness to take risk highlights Portugal progress in reforming its economy. The deal may also help kickstart the ECB’s bond purchases.
What’s a bond investor to do when safe government yields range from negligible up to low? For now, the solution appears to be buying corporate debt. That means being exposed to a slowing economy, and could end badly if central banks withdraw their largesse. But the good times probably won’t end soon.