Spain’s SME credit agency ICO opens year with €1 billion bond sale

Spain’s Official Credit Institute ICO reported its first benchmark issue of the year. The government agency placed Monday €1 billion in seven-year bonds with a 4.75 percent coupon and a 40 basis points-higher premium risk than Treasury bonds with the same maturity date at 360 bp. The ICO debt sale was further confirmation that investors’ fears have abated, as the Spanish government said it had already assured almost 9.5 percent of all market credit needed in 2013–that is €11.4 billion.

The Chairman of ICO, Román Escolano, presented last December the institute’s plans for 2013, during which the agency is set to provide credit lines totalling €22 billion to Spanish companies and the self-employed. These facilities are available since January 2.

“From a strategic perspective, in 2013 the Institute is committed to improving the funding of the liquidity needs of companies and to supporting and promoting the international expansion of Spanish companies,” Escolano said, “funding both foreign investment and the export activities of such companies.”

Analysts noted that the ICO offer coincided with several other options on the European primary bond market, like highly-rated European Financial Stability Fund debt, sovereigns from Lithuania and Israel, and banks and corporates wanting to take advantage of the seemingly optimistic opening of the year.

According to the Spanish Treasury’s latest data, public debt in foreign portfolios increased to 36.53 percent in December from 35.34 percent in November. The moderate change, though, would have just dented the trend in 2012, when foreign positions fell by -€56.8 billion, the most since 1995.