June 15, 2021

The Treasury places 4,445 million in letters, with interest near minimums

The Spanish Public Treasury has placed on Tuesday 4,445.6 million euros in six- and twelve-month letters that have returned to negative, at a lower marginal interest, which has been close to historical lows.

Despite the turbulence that the market is experiencing due to the expansion of the coronavirus and its economic consequences, Spain has managed to sell on Tuesday 3,740.6 million euros in 12-month letters, at a marginal return of -0.489%, lower or more negative than -0.452% applied in January.

Similarly, another 705 million euros have been awarded in six-month bills that have also been at a lower interest rate of -0.505%, compared to the previous -0.469%.

Six- and twelve-month letters recorded historical lows in September 2019, at -0.558%, and at -0.515%, respectively.

Although 4,445 million euros have finally been awarded, the demand from investors has reached 8,740.3 million, so that the auction ratio – difference between what was requested and finally placed – has been 1.9 times .

The Treasury has held this first auction in March amid the panic aroused in the market for the rapid expansion of the coronavirus and its economic consequences, which led investors to seek refuge in assets considered safe, such as debt from solvent countries, basically the United States and Germany.

In the case of Spain, in the last sessions, the performance of the Spanish long-term debt rebounded above 0.3%, with the risk premium close to 100 basis points.

On the contrary, the German bond (the benchmark in Europe and considered the safest) approached historical lows, close to -0.71%.

In addition to the auction on Tuesday, the Treasury will again appeal to the market on Thursday, in which it plans to place three-year government bonds, five and ten year obligations, and other fifteen year obligations indexed to inflation.

The objective of the Treasury is to place up to 5,750 million.


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