Tesoro Público has executed its third syndication of the year with the issue of a new 10-year Obligación del Estado. The Treasury issued 10 billion euros, with a demand of 125 billion, the second highest ever recorded in the history of the Treasury, behind only the 10-year bond issued in January 2024.

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Treasury issues 10 billion euros of a new 10-year bond

This high demand is 12.5 times the amount issued, the highest coverage ratio ever for this maturity.

This historic demand, together with the high participation of international investors (87.9%), underscores the strength of Spanish public debt, the Treasury’s solid access to the market and investor confidence in the country’s economy, in the current context of international uncertainty and the gradual withdrawal of the European Central Bank’s purchase programme.

The quality and diversity of the allocation of this new government bond is noteworthy, with demand spread over 470 investor accounts, very diversified both geographically and by type of investor. Non-resident investors accounted for 87.9% of the total. The United Kingdom and Ireland stood out with 24.3%, France and Italy with 18.2% and the United States and Canada with 12.2%. Scandinavian countries accounted for 7.4% and Germany, Austria and Switzerland for 6.0%. The remaining European investors accounted for 9.5% of the allocation. Asia accounted for 8.4% and the Middle East 1.6%. Other investors accounted for 0.3%.

By type of investor, fund managers accounted for 38.5% of the total, followed by treasury banks with 17.7%, central banks and official institutions with 17.3% and insurance companies and pension funds with 16.2%. Other banking services companies accounted for 4.9%, leveraged funds for 3.3% and other investors for 2.1%.

The bond issued today matures on 31 October 2034 and has a coupon of 3.45%. The yield was 3.473%, only 6 basis points above the current 10-year benchmark, which has a shorter maturity in April 2034. The high demand has enabled the issuance cost of the new benchmark to be contained by reducing the initially announced spread by 2 basis points.

With this syndication, the Treasury has already issued 95.113 billion euros in medium and long term in 2024, 54.9% of its medium and long term financing programme for 2024. The average maturity of outstanding government debt is 7.96 years and the average cost of the Treasury’s debt portfolio stands at 2.159%.

BBVA, Banco Santander, Deutsche Bank, HSBC and JPMorgan and Morgan Stanley acted as managers of this issue. The rest of the Bonos y Obligaciones del Estado Market Makers group acted as co-manager