This Tuesday, the Spanish Public Treasury placed 4,791.848 million euros of short-term debt with the lowest yields, both for six-month bills and for the twelve-month benchmark.
According to data published by the Bank of Spain, the first placement made in October fell within the expected medium-low range. Although the investment appetite of the markets for Spanish securities remained, the combined demand for the two references did not double the amount obtained, with requests of 8,493.275 million euros.
In more detail, the Treasury placed 1,447 million euros in six-month bills, against a request of 3,118 million euros, and offered a marginal profitability of 2.919%, far from the 3.242% of the previous issue and marks the lowest level since February 2023.
In the case of the twelve-month bill auction, the organization allocated 3,344 million euros, with requests for 5,375 million, at a marginal interest of 2.598%, lower than the previous 2.970% and amounting to the lowest level since December 2022.
Treasury bill auctions have been affected in recent months by monetary policy decisions. With the rise in rates, as well as the remuneration offered to investors, interest in debt repurchase has increased, particularly in the case of the acquisition of Treasury bonds by households.
The same data from the Bank of Spain confirms that households and private non-profit institutions serving households (NPISH) the largest holders of this type of short-term debt. Concretely, they went from 1,826 million euros in Treasury bills at the end of 2022 to 27,353 million in July 2024 – the latest figure available.
Now that the European Central Bank (ECB) has started the path of lowering rates in the face of more controlled inflation, the Treasury has already reduced the remuneration of bonds during several auctions, already losing the level of 3%.
Government bonds and bonds will be auctioned on Thursdaywith the objective of placing between 4.250 million and 5.750 million euros. During this second meeting of the year, the Treasury will issue 3-year government bonds, with a coupon of 2.50%; Government bonds with a remaining maturity of 4 years and 7 months, with a coupon of 1.45%; Government bonds indexed to inflation for 15 years, with a coupon of 2.05% and Government bonds with a remaining life of 16 years and 10 months, with a coupon of 4.70%.
In anticipation of this auction, the reference rates are 2.535% for 3-year government bonds; 1.399% for State Bonds indexed to inflation for 15 years and 2.698% for State Bonds with a residual maturity of 4 years and 7 months.
Since the start of the year, the Treasury has already issued 146.860 million euros in the medium and long term, or 84.8% of its financing program for 2024 with an average lifespan of the State debt in circulation of 7.9 years and an average cost of the Treasury debt portfolio. of 2.21%.
Expected gross emissions this year will amount to 257.572 million euros, or 2% more than in 2023 due to the increase in depreciation. The bulk will be covered by the issuance of medium and long-term instruments with the aim of maintaining the average life of the public debt portfolio.
As part of the Treasury’s strategy for 2024, it is planned to once again use syndications for the issue of certain government bond references. Among the objectives also includes maintaining the diversification of the investor base and engaging in the issuance of green bonds as a structural element of the financing program, thus strengthening the sustainable finance market.
