Undersecretariat of Treasury this Tuesday 3,977.3 million euros in 6 and 12 month invoicesAccording to data published by the Bank of Spain, it is in the expected mid-range and has done so by reducing the profitability offered to investors in both benchmarks.
Despite the reduced interest on these bond issues, high levels of profitability maintained the markets’ appetite for investment in Spanish securities. However, the common request of both references is Failed to double prize amount with claims of €8,209.99 million.
Specifically, the Treasury invested €1,159.51 million in six-month bonds. Demand of 2,777.09 million eurosand offered a marginal return of 3.620%, down from the previous level of 3.747%.
At the auction of twelve-month bonds, the institution affiliated with the Ministry of Economy awarded 2,817.79 million euros on demand from investors for 5,432.90 million, and the marginal interest was set at 3.327%, below the previous 3.630%. It has reached its lowest level since May.
It goes on like this General decline in government debt yields since October 9. This was reflected in a decline in the Bills’ profitability; 12 month old Bill was also older.
The Ministry of Economy highlighted the interest of retail investors. Non-competitive bids (bids without a price, only stating the amount requested), mostly from individual investors, as an approximation of their participation. represented 47%.
This positive development in yields and strong retail interest in the Bills in Spain means that risk premiums for the Bills continue to be compressed (5 basis points for the 6-month Bill and 6 basis points for the 12-month Bill).
Households remain the main bearers of bills
The auction took place at a time when households and private non-profit institutions serving households (Isflş) held 99 million euros of Treasury bills in September 2022. 21.352 million in September 2023were the largest holders of such short-term debt for the second month in a row.
According to the latest data published by the Bank of Spain and compiled by Europa Press, the high profitability of short-term securities has had a very significant impact on the distribution of Treasury bill assets, with households and non-financial institutions significantly increasing their holdings. last year’s attendance The share increased from 0.1% in September 2022 to almost 30% in September 2023.
Households that increased their assets by 5% compared to the previous month are listed as follows: Largest holder of Spanish Treasury bondsIt ranks ahead of foreign investors (18,704 million), public administrations (3,732 million), non-financial companies (6,426 million), monetary financial institutions (11,054 million) and money market funds and other financial intermediaries (10,217 million).
The improvement in interest rates offered in parallel with the interest rate increases made by the European Central Bank (ECB) in recent months also kept the markets’ appetite for Spanish bonds alive.
Retail investors therefore show great interest in purchasing debt, mostly in the short term, especially given its high profitability on short-term bills, which has increased since the beginning of 2022.
Medium and long-term debts will be auctioned on Thursday
Following the first auction of the month on Tuesday, the Treasury will return to the markets on Thursday with the issuance of medium and long-term debt. An amount between 2 billion 500 and 3 billion 500 million euros is expected.
In particular, the organization will auction Government Debts with a remaining life of 5 years and 11 months and a 0.60% coupon; Inflation-Indexed Government Debt Securities with 0.70% coupon and 15-year Government Debt Securities with 3.90% coupon, with a remaining life of 10 years.
References for this tender start from a marginal interest of 1,550% on inflation-indexed Government Debts with a remaining life of 10 years; 3.295% for Government Debts with a remaining life of 5 years and 11 months and 3.902% for Government Debts with a maturity of 15 years.
After this tender The Treasury will return to the markets on December 12 with a 3- and 9-month bond issue to close the year.The voyage planned for December 14 was cancelled.
Spain to reduce planned debt issuance by $5 billion
The gross issuance of the Public Treasury will be 256 billion 930 million euros this year; This represents an increase of 8.2 percent over the 2022 forecast due to the increase in interest rates.
Regarding net issuance, First Vice President and Minister of Economic Affairs Nadia Calviño announced last month that Spain will reduce debt issuance planned for 2023 by 5 billion euros, thanks to the “good progress” in the Spanish economy. “Loose” adherence to financial goals.
However, according to Calviño, Spain will increase its net debt issuance from 70,000 million to 65,000 million, which will put the country in a position “resilient and strong in the context of rising interest rates.”