2023-08-16 12:49:22
The interest that the State pays to investors for buying public debt confirms its downward trend. Last week, in the last auction of 6 and 12-month bills, the interest paid by Spain for one-year bills was lowered to 3.682%, twelve hundredths less than in the previous auction, when it placed these titles with a marginal yield of 3.804%, while the interest of the 6-month reference rose slightly with respect to the previous bid, going from 3.629% to 3.665%. This Wednesday the same pattern has been repeated. After months of skyrocketing interest, the Public Treasury has placed 2,048 million euros in 3- and 9-month bills, above the expected average range, and has cut the remuneration of the 9-month reference and raised, albeit slightly, that offered in bills at 3 months, according to data from the Bank of Spain.
Investor demand has once again widely exceeded the amount placed on the markets and in this Wednesday’s auction the requests have exceeded 5,350 million euros, more than double the amount awarded. Specifically, the department under the Ministry of Economic Affairs has placed 523 million euros in 3-month bills, in response to a demand of more than 1,889 million euros, and the marginal interest offered has stood at 3.535%, slightly above the 3.531% of the previous auction and the highest percentage since November 2011. In 9-month bills, the Treasury has awarded almost 1,525 million euros, below the 3,462 million requested by investors, at a marginal return of 3.7%, lower than the 3.810% offered in the previous issuance of July 11, when the highest yield of this benchmark was reached, launched in February 2013.
The rise in interest rates had triggered the profitability of public debt to maximums in the last decade, attracting thousands of private investors for months. However, the last two auctions point to a moderation of the interest offered below the yield charged by the European Central Bank (ECB) for the money it lends to banks, located at 4.25%. Even so, due to their short repayment terms and the high profitability that they still offer compared to other financial products with similar security for the investor, bills continue to be in high demand by retail investors.
With this Wednesday’s auction, the Treasury closes the issues for the month of August, since the bond and obligation auction initially scheduled for tomorrow Thursday has been cancelled, as is usual in the month of August. Thus, the Treasury will return to the debt markets in September, specifically on the 5th, with a 6- and 12-month bill issue.
Treasury targets for 2023
The gross issuance by the Public Treasury will be 256,930 million euros this year, which represents an increase of 8.2% compared to the estimate for 2022, due to the rise in interest rates. For its part, the net indebtedness of the Public Treasury in 2023 will remain at 70,000 million. Breaking down by type of instrument, the Treasury Bills are expected to provide negative net financing of 5,000 million, so the State bonds and obligations, together with the rest of the debts in euros and foreign currency, will contribute the remaining 75,000 million.
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