Spanish Treasury seduces investors, yields fall under 1%

By Tania Suárez, in Madrid | The Spanish Treasury keeps reducing the yield of its public auctions and demand keeps increasing: 5.9 times the offer (almost €15bn). Just a few hours after Europe has given the green light to Greece’s rescue package, the Spanish Treasury has sold €2,5bn –the maximum expected, at 3 and 6 months bills, and thus, it has reached the high end of the target range.

Specifically, it has sold €1,736.42mn of the €7,007.95mn demanded by investors in bills at 3 months. The average interest rate for this type of bill has gone down from 1.285% to 0.396%, whereas the marginal interest has fallen to 0.440% vs. the previous 1.330%. On the other hand, the Spanish Treasury has placed €764mn in 6 months bills, with an excess demand of 10.24 times (vs. 6.9 times reached last auction on January). In this case, the average interest rate has gone down to 0.779% vs. the previous 1.847%, and the marginal interest fell to 0.780% versus 1.900% of the January 24 auction.

The Spanish Treasury has already issued more than €33bn so far this year, which involves more than 38% of €86bn gross issuance that Spain expects to place in the medium and long term throughout 2012. Net issuance will be €36bn vs. €48bn in 2011.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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