Spain’s Debt Issuance Signals Steady Demand Amid Mixed Yields
Spain’s Treasury reported a mid-to-high range debt sale on Tuesday, totaling about 4.94 billion euros in short-term issuance. The operation relied on stronger yields for six-month bills while trimming rates on twelve-month notes, according to data from the Bank of Spain. Demand for both maturities remained healthy, though total bids did not reach the 8.99 billion euros the government had targeted.
For the six-month bills, the Treasury attracted 1,124.54 million euros against 2,774.83 million euros in bids. The marginal yield rose to 3.679%, up from 3.665% on the prior issue, marking the highest rate seen since July 2012. In the twelve-month segment, the Ministry of Economic Affairs awarded 3,816.43 million euros from bids totaling 6,213.03 million euros, with a marginal yield of 3.680%, slightly below the previous 3.682%.
Long-term debt
The Wednesday operation was not the only debt action planned for the week. A new auction of government bonds and other securities was expected on Thursday, with an anticipated range of 5.75 to 7.25 billion euros. Investors would see a selection of 10-year and 30-year bonds, alongside instruments with shorter maturities, including some inflation-linked notes. These longer-dated issues would mature in 2030, leaving seven years and three months of life, with coupons such as 1.3% for liabilities due in October 2026, 1% for November 2030, 3.55% for October 2033, and 1.90% for 2052. The September issue would be followed by another 12-month instrument featuring three and nine monthly bills and 21 with bonds and government obligations.
As reported by the Ministry of Economic Affairs and Digital Transformation, the Public Treasury has already covered about 73% of its planned financing for 2023, representing roughly 25% of all medium- and long-term financing, while the average cost of public debt has hovered around two percent.
2023 goals
Gross exports from the Treasury’s Undersecretariat were projected to reach 256.93 billion euros this year, reflecting an 8.2% increase from 2022 forecasts driven by higher interest rates. The net debt level for 2023 was expected to stay near 70.0 billion euros. By instrument type, Treasury Bills were anticipated to contribute a net negative financing of five billion euros, with government bonds and other debt instruments providing the balance of about seventy-five billion euros, alongside euro and foreign currency denominated debt.
Source disclosures from the Bank of Spain and the official ministry notes indicate that the debt issuance strategy remains aligned with market demand and macroeconomic conditions. The aim is to preserve liquidity while keeping debt service costs at manageable levels for the near term, a point of interest for investors in Canada and the United States who monitor Iberian public financing alongside global rates.
Citations: Bank of Spain and official ministry disclosures provide the basis for these figures and the interpretation of Spain’s debt issuance strategy in relation to current market conditions.