By Julia Pastor, in Madrid | Spain has been lucky, again. Just two days after an excellent placement of bonds at 12 and 18 months, the Treasury has auctioned bonds again at five and 10 years obtaining a very satisfactory result. It placed €6.03bn as opposed to the expected €3.5bn. Compared to the previous auction, it paid a percentage point less in interest (4%) for debt at five years and between 5.2% and 5.5% for the 10-year one. The total demand was over €11.213bn.
According to Citi analysts in Spain,
“demand continues to be the key factor, and in this case it is a reflection of the investors’ elevated interest. Although we expected the demand to be high, we admit that we have been rather surprised.
“Even the interest rates , considering that some of the references were above the secondary one,” says the chief strategist of the firm in Spain, José L. Martínez Campuzano.
Also, he recognises that the auction marks important differences with Italy’s auction on Wednesday. Taking as a reference the Spanish bond at 10 years at 5.85%, the country risk maintains itself at 408bp while the Italian is above the 529 bp.