Spanish Treasury’s winning streak, so far

MADRID | The Spanish Treasury has once again successfully passed a new market test by placing €4,880.15 million in bonds at 12 and 18 months and at lower rates than the previous auction and thus, continues on its winning streak that began in December despite the downgrade of Standard & Poor’s.

The Treasury maintained itself at the top of the range as it expected to obtain between €4bn and €5bn. Demand was very high and exceeded the €16bn threshold. Interests declined considerably in this issuance and remained at 2% versus the 4% of the last auction of this type of bond and following the decline of the two previous issues.

Specifically, the Treasury placed €3,007.05mn of the €10,658.74mn demanded by the investors in bonds at 12 months. The average interest rate for this type of average bond has gone down from 4.050% to 2.049% while the marginal interest has gone from 4.088% of the previous issue to 2.150%. It has also issued bonds in the amount of €1,873.10 million at 18 months of the €6,054.94mn demanded. In this case the average interest rate was 2.399% versus the 4.226% of the December 13 auction while the marginal rate was of 2.490% versus the previous 4.250%.

Some analysts attribute the Treasury’s winning streak to the fear that the future may be worse while others simply believe that it is due to the intervention of the European Central Bank, which in December decided to offer unlimited financing to European entities.