Portugal successfully placed government bonds worth €750m today, but had to pay sharply higher rates even though the offers were oversubscribed.
Portugal is among several euro zone countries, including Ireland and Greece, grappling with debt and public deficits that have raised fears for their solvency.
The Portuguese government raised €300m through 10-year bonds with a yield - or rate of return - of 6.242%, up sharply from 5.312% at a similar operation in July. The offer attracted 4.9 times more bids than there were bonds on offer.
Portugal also raised €450m in 4-year bonds at 4.695%, up from 3.621% in July. Demand was 3.9 times the amount of bonds on offer.
Analysts said that many investors are continuing to bet on Portugal as they don't believe there will be a payments default or a debt restructuring.
Portugal's government insists it can meet its target to reduce the public shortfall to 7.3% of output this year from 9.3% in 2009.
Given that Portugal has already covered most of its funding needs for this year, it is unlikely to ask the European Union/International Monetary Fund for financial support in the short term.
The EU and IMF have established a mechanism to come to the aid of euro zone countries threatened with severe financial instability as a result of problems in their public finances.
