The Treasury has accelerated public debt placement operations with the issuance this Tuesday of a syndicated bond for 13,000 million euros. These types of operations are carried out outside the usual auction calendar and according to opportunity criteria, depending on the interest of institutional investors.
On this occasion, 10-year bonds have been issued with a demand equivalent to 85,133 million euros, 6.6 times higher than the offer, according to the Ministry of Economic Affairs. It is the second largest debt issuance so far this year and purchase requests have been at very close to record levels. The counterpart is that the cost of debt continues to rise.
The bonds have received strong interest from international investors, who have monopolized 87% of the placement. It is for the Government a sign of “the confidence of the investor base in the Spanish economy”, especially in a particularly sensitive year for debt issues.
The cost of the debt continues to rise at the rate of the increases in the interest rates applied by the ECB, already at 3.75% and on the way to 4%. In the Treasury issue, the yield has remained at 3.5%, a level comparable to that of the 2014 issues.
This operation allows speeding up the auction calendar established at the beginning of the year. The Treasury has already financed 141,288 million euros, 58.8% of its medium and long-term program for all of 2023 and, after the new placement, the average life of the outstanding State debt reaches 7.92 years and the cost remains at 1.938%.
British and Irish investors have bought 41.8% of the issue, compared to 17.2% of French and Italian. Requests for another 5.4% have come from Germany, Austria and Switzerland, and there has also been a small proportion of investors from the Middle East and North America.
By investor profile, fund managers are the most prominent, with 42% of purchases, compared to 22% of banks and 13% of insurers and pension funds. Central banks and official institutions have bought 10%. BBVA, Banco Santander, Barclays, Crédit Agricole, Deutsche Bank and Goldman Sachs have acted as directors of this issue.
