The Public Treasury carried out a mid to long term debt auction this Thursday, placing 6,927.2 million euros in the market at the expected mid to high range and paying investors higher yields. The data from the Bank of Spain shows yields approaching 4.2 percent for 30 year liabilities.
Investors have remained drawn to Spanish debt securities amid broad demand for all references, with total bids reaching 12,594.24 million euros. In the end, the issue almost doubled the prize seen in prior markets.
Specifically, the Treasury offered to investors in this September second issue bonds with ten and thirty year maturities, as well as other instruments with a remaining life of three years and two months. Other notes mature in 2030 and are inflation indexed with a remaining life of seven years and three months.
Regarding the inflation indexed liabilities with seven years and three months remaining, the institution placed 482.65 million euros against bids totaling 927.65 million, with a marginal yield of 1.035 percent, up from 0.886 percent previously.
In the ten year segment, the Treasury absorbed 2,598 million euros against demand of 4,488.02 million euros, yielding 3.668 percent, higher than the previous 3.613 percent.
For the 30 year state obligations, the Treasury absorbed 1,902.35 million euros against a demand of 3,710.35 million euros, with a marginal rate of 4.193 percent, above the last auction’s 3.985 percent.
The Treasury also issued a loan of 1,944.2 million euros for government bonds with a remaining life of three years and two months, responding to total requests of 3,468.22 million euros at a marginal yield of 3.315 percent.
Letter interest increased to six months
Last Tuesday the Treasury conducted a short term loan of 4,940.97 million euros in the first September auction, which produced higher yields. Invoices for up to six months were issued, yet the interest on 12 month bills was reduced.
The market appetite for Spanish titles remains strong as high rates persist in line with the European Central Bank’s rate hikes, particularly for short term debt.
The first September issue will be followed by another on the 12th and 21st, with three and nine month letters accompanied by government bonds and obligations.
2023 goals
The gross issuance target for the Public Treasury in 2023 is 256.93 billion euros, representing an 8.2 percent increase over 2022 forecasts due to higher interest rates.
The net debt of the Public Treasury in 2023 is projected to remain the same at 70,000 million. By instrument type, Treasury Bills are expected to provide a net negative financing of 5 billion, with government bonds and debt contributing the rest, alongside euro and foreign currency denominated debt.