The Treasury has found a good reception from international investors in its latest debt placement. The placement of a 10-year syndicated loan of 10 billion euros set another record. This was explained on Tuesday by the Minister of Economy, Nadia Calviño, after the Council of Finance Ministers of the European Union (Ecofin). Calviño explained that there was a demand of 47,000 million euros, which, he said, sets a "historical record" that confirms an "excellent" start of the year for the Spanish debt.
The emission surpasses another performed just a year ago and that, according to Bloomberg, until now was the one that had attracted the most interest among investors. Calviño highlighted the presence of mostly Asian capital among buyers. "This is very good news because it ratifies the message we have been receiving in recent months, and the enormous interest on the part of foreign investors in our country has been maintained and even increased at the beginning of 2019," the minister said.
This Tuesday was the first placement of this type made by the Treasury this year. BBVA, Citi, Credit Agricole, HSBC, JP Morgan and Société Genérale took charge of it. Despite the fact that during the past year there were certain turbulences in the sovereign debt markets Because of the Italian crisis (which was a limited contagion to other economies in its environment), the minister considered that in general there was a "positive positive" situation. According to Calviño, who admitted that there is no need to "lower the guard", in the last semester the risk premium of the Spanish bond was reduced until reaching "historically low" levels, with the consequent reduction of financing costs for public coffers . The Ministry of Economy has explained in a note that the bond expires in April 2029 and has a coupon of 1.45%. The profitability of the issue is 1,462%, equivalent to 65 basis points above the rate mid-swap (type of reference of the interbank market for interest rate swaps).
Meeting of the Eurogroup
The minister participated in the Eurogroup and the Ecofin. Both meetings were a first approximation to the two large folders that finance holders will have this semester: the budget of the euro zone and the deposit guarantee fund. In the next session of the Eurogroup the ministers will already debate on that budgetary instrument that must guarantee the "convergence" and the "competitiveness" of the countries of the euro zone, although Calviño assured that the technical works will continue "on their function of stabilization", as the last one agreed Eurogroup. Diplomatic sources assured that the division continues with regard to this mechanism and that the northern countries will subject it to conditionality to access those funds.
As for the fund to guarantee deposits, a high-level group will be created that, in addition to examining the technical characteristics of that instrument, will also assess other elements such as the limitation of banks' exposure to their country's sovereign debt. That is, precisely, one of the main demands of Germany to continue advancing and one of the great reluctance of countries like Italy.
The minister also addressed on Monday the vice-president of the Commission Valdis Dombrovkis and the commissioner of Economic and Monetary Affairs, Pierre Moscovici, the General Budgets of the State. Moscovici affirmed that the Commission will pronounce "soon" on the accounts, but stressed that the discussions are developed in a "constructive, in the best spirit and with the will to avoid excessive formalities that would be heavy and expensive," in reference to that only a new draft of the Budgets will be demanded in case the changes that are introduced in the Parliament are of great importance.