Spain’s public treasury saw bonds and government debt issuance stay within the expected high range, supported by yields attractive to investors. Data from the Bank of Spain show the issuance and profitability aligning with projections, reinforcing strong demand among buyers and confirming the credibility of the borrowing plan.
Strong profit prospects kept market appetite robust for Spanish securities during the latest January auction, with total demand reaching 10,050.15 million euros and buyers showing confidence in a favorable yield environment.
A public institution issued a three year government bond with a 2.50 percent coupon. The remaining maturities extend to six years and nine months for other state debts at a 1.25 percent coupon, and 15 year instruments with a 3.90 percent coupon. These offerings illustrate a diversified debt profile designed to balance short and long term funding needs while maintaining manageable borrowing costs.
The Treasury placed 2,293.23 million euros into three year bonds, with investor demand totaling 3,743.35 million euros and a marginal rate rising to 2.811 percent from 2.592 percent previously.
In the 15 year segment, the organization raised 2,323.04 million euros against a demand of 3,383.05 million, with a marginal yield at 3.637 percent, higher than the prior 3.593 percent.
For bonds with a remaining life of six years and nine months, the Treasury collected 1,648.56 million euros when demand stood at 2,923.75 million and the marginal return stood at 2.961 percent.
On Tuesday, it reduced the offered rate to 1.997 million
The second auction of the week followed the Tuesday borrowing that saw a short term loan issued at 1,997.76 million euros and a reduction in fees offered to investors for both the three month and nine month references.
Retail investors continued to show keen interest in debt purchases, especially in the short term where high profitability remains a key draw for buyers.
Retail holdings climbed to nearly 23,000 million euros by the end of October, representing more than 31 percent of the total Letters in circulation. That level marks a record and positions retail investors as the main holders of the debt market in Spain.
A month of record demand for syndicated issues
The opening month of the year featured a 15 billion euro issuance in a new 10 year syndicated bond set to mature on April 30, 2024, drawing a standout demand of 138 billion euros.
The bond matures on April 30, 2034 and carries a 3.25 percent coupon, lower than the 3.55 percent of the last 10 year issue in June 2023. The yield sits at 3.259 percent, about nine basis points above the 2023 level. The current baseline maturity for the 10 year is October 2033.
Allocation highlighted quality and diversity, with demand spread across 512 investment accounts, reflecting geographic and investor-type variety.
2024 Treasury financing program
The 2024 financing plan targets about 55,000 million euros in new borrowing for the year, a reduction of 10,000 million compared with 2023.
The gross issuance is expected to reach 257,572 million euros, around 2 percent higher than 2023, driven by increased depreciation and a greater emphasis on medium to long term instruments. The strategy also aims to balance the average life of the public debt portfolio.
Regular Treasury bond issuances will include 48 scheduled auctions for government bonds and debt instruments. In 2024, the Treasury will again use syndication for some debt references and will continue to diversify the investor base. Green bond issuance remains a structural element of the financing program, reinforcing the sustainable finance market in Spain.