It will return to the markets on Thursday.
The national treasury allocated 1,985.36 million euros this Tuesday to a three- and nine-month bond auction. The result sat within the expected middle range according to data from the Bank of Spain, rewarding investors with higher yields on both benchmarks.
Private investors have shown strong appetite for these short and mid-term loans due to their robust profitability since early 2022. Demand in this auction surpassed 5,367 million euros, more than double the amount awarded.
The agency in charge, part of the Ministry of Economy and Digital Transformation, invested 463.36 million euros in quarterly notes, compared with demand of 1,983.96 million. The marginal rate rose to 2.940 percent, up from 2.670 percent in the March auction, marking the highest level seen since November 2011.
The treasury posted its highest take from nine-month bonds, with a marginal yield of 1.522 percent that was below the 3,383.49 million euros investors demanded, while the marginal yield stood at 3.199 percent, above the prior 3.034 percent reported in February 2013.
It will return to the markets on Thursday.
Following Tuesday’s auction, the treasury will hold a government obligations auction next Thursday with expectations to award between 5,500 million and 6,500 million euros.
Specifically, seven-year government bonds with 0.80 percent coupons; ten-year bonds maturing in 10 years carrying a 3.15 percent coupon and a remaining maturity of 25 years and six months with a 2.70 percent coupon.
Against these auctions, past issues carried marginal yields of 3.527 percent for seven-year bonds and 3.416 percent for ten-year bonds.
2023 Treasury targets
Based on recent data from the Ministry of Economy, this year has seen about 36.4 percent of the medium- and long-term financing plan realized so far. The average life of outstanding government debt stands at 7.85 years, with an average portfolio cost of 1.83 percent.
The treasury’s gross issuance this year is projected at 256,930 million euros, reflecting an 8.2 percent increase from prior forecasts due to higher interest rates.
Net debt for 2023 is expected to sit around 70,000 million euros. By instrument type, treasury bills are anticipated to generate a net negative financing of 5,000 million euros, while government bonds and other liabilities will contribute the remaining 75,000 million euros, with some debt denominated in foreign currencies.