2023-10-17 14:40:09
The Spanish Public Treasury has received a record demand in its latest debt auctions.
This Tuesday, the organization placed 3,000 million euros in a new 15-year bond linked to European inflation and another 2,037 million euros in 3- and 9-month bills. But the demand for both auctions has exceeded 33,000 million euros.
As explained by the Ministry of Economic Affairs and Digital Transformation, the demand for this inflation-linked bond, the first launched in five years, has been around 28,000 million euros, being the highest received by Spain in this type of issue. and exceeds that recorded by the main European Treasurys this year for a mea auction with similar characteristics.
The Treasury gave orders to Citi, Deutsche Bank, HSBC, JP. Morgan, Morgan Stanley and Societe Generale the issuance of this fifteen-year inflation-linked syndicated bond that matures on November 30, 2039.
As highlighted by the Department headed by Nadia Calviño, the good reception of the market, as well as the quality of the orders, “reflect the confidence of investors in the Spanish economy, after the publication of the new economic forecasts and reduction of the ratio debt/GDP, as well as the announcement of the reduction of 5,000 million in the Treasury’s financing needs for 2023.
This good reception from the market also joins that of the Letters auction which took place this Tuesday. Specifically, the organization has placed 2,037.53 million euros in 3 and 9 month bills, in the expected mid-range, and has raised the remuneration for both references, offering more than 3.8% in the case of bills to 9 months.
Investor demand has once again greatly exceeded the amount placed in the markets and in the auction The requests have exceeded 5,398.69 million euros, more than double the amount awarded. In the case of 9-month bills, demand has reached 3,180 million euros, the highest figure in history for debt at this term, compared to the 1,438.7 million placed.
In the case of shorter-term bills, demand has reached 2,130.08 million euros, although 559.39 million euros have been placed in 3-month bills, and the marginal interest offered has been 3.590%. , above the 3.490% of the previous September auction, highest levels since November 2011.
After these auctions, The Treasury will return to the markets on Thursday, October 19, with a bond issue of the State in which it hopes to place between 4,000 million and 5,000 million euros.
Spain will reduce the planned debt issuance by 5,000 million
The gross issuance by the Public Treasury will be 256,930 million euros this year, which represents an increase of 8.2% compared to what is estimated for 2022, due to the rise in interest rates.
Regarding net issuance, the first vice president and minister of Economic Affairs, Nadia Calviño, has announced that Spain will reduce the debt issuance planned for 2023 by 5,000 million euros, which will go from 70,000 million to 65,000 millionthanks to the “good progress” of the Spanish economy and the “loose” compliance with fiscal objectives.
Calviño has also highlighted Spain’s position of “resilience and strength in this context of rising interest rates”, since, although interest rates have increased by 450 basis points, “the average cost of Spanish debt has only increased around 40 basis points thanks to the management of recent years, which allows refinancing needs to be reduced to 13% per year”.
Likewise, he has highlighted that average amortization periods of eight years are maintained and that, all of this, reflects the “strong confidence” of investors and international markets in the good progress of the Spanish economy and the fulfillment of fiscal objectives.
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