This excellent result comes a day after the Treasury announced a reduction in net issuance by 10 billion euros for 2024 compared to the close of 2023 and reaffirmed the target of reducing the debt-to-GDP ratio to 106.3%.
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Treasury starts 2024
Tesoro Público successfully executed its first issue of the year. The new 10-year bond received a record demand of 138 billion, the highest ever for a sovereign issue in the history of the euro and nine times the amount issued.
This historic demand, together with the high participation of international investors, is evidence of the strength of Spanish public debt, the Treasury’s solid access to the market and investor confidence in the Spanish economy, in the context of international uncertainty and the gradual withdrawal of the European Central Bank’s purchase programme.
The operation was carried out a day after the Treasury’s financing strategy for 2024 was announced, which includes a reduction in net issuance for this year of 10 billion euros compared to the end of 2023, to 55 billion, thanks to the strength of the economy and the reduction of the public deficit.
The quality and diversity of the allocation of this new government bond is noteworthy, with demand spread over 512 investor accounts, very diversified both geographically and by type of investor.
Non-resident investors accounted for 92.3% of the operation. Of particular note were the United Kingdom and Ireland with 33.4%, France and Italy with 20.2%, Germany, Austria and Switzerland with 9.2% and the Scandinavian countries with 5.4%. The remaining European investors accounted for 11.5% of the allocation. Asia accounted for 7.4%, the Middle East 3.5% and the United States and Canada 1.4%. The weight of other investors was 0.3%.
By type of investor, fund management companies accounted for the largest share (39.8%), followed by treasury banks (22.4%), central banks and official institutions (14.2%) and insurance companies and pension funds (11.5%). Other banking services companies accounted for 7.4%, leveraged funds for 3.8% and other investors for 0.9%.
The bond issued today matures on 30 April 2034 and has a coupon of 3.25%, lower than the 3.55% coupon of the last 10-year issue in June 2023. The yield was 3.259%, 9 basis points above the current 10-year benchmark, which has a shorter maturity in October 2033.
With this syndication, the Treasury has already issued 26.327 billion euros in just ten days, 10% of its financing programme for 2024. The average maturity of outstanding government debt is 7.85 years and the average cost of the Treasury’s securities portfolio stands at 2.1%.
BBVA, Banco Santander, Barclays, Crédit Agricole, Deutsche Bank and JPMorgan acted as managers of this issue. The rest of the Bonos y Obligaciones del Estado Market Makers group acted as co-managers.
With this syndication, the Treasury has already issued 26.327 billion euros in just ten days, 10% of its financing programme for 2024. The average maturity of outstanding government debt is 7.85 years and the average cost of the Treasury’s securities portfolio stands at 2.1%.
BBVA, Banco Santander, Barclays, Crédit Agricole, Deutsche Bank and JPMorgan acted as managers of this issue. The rest of the Bonos y Obligaciones del Estado Market Makers group acted as co-managers.