Spain yields US$4.3b from T-bond sale
By Daniel Woolls |
June 18, 2010, Friday
|
Print Edition
Print Edition
SPAIN - fighting speculation it is headed for a bailout - raised nearly 3.5 billion euros (US$4.3 billion) yesterday as investors snapped up an offering of treasury bonds, although at sharply higher interest rates that indicate they still view government finances with skepticism.
Markets welcomed the result, with the euro and stock markets rising.
Spain is adamantly denying persistent speculation that its troubled public finances and credit problems with its banks are pushing it toward some sort of rescue similar to the one given to Greece by the European Union and the International Monetary Fund.
Unicredit analyst Chiara Cremonesi said yesterday's auction went well, noting Spain had issued close to the maximum of the range announced and that demand was solid.
"Overall, all the elements point at a good result, although a note of caution comes from the fact that the amount sold was rather subdued if one considers that Spain sold two bonds," Cremonesi wrote. "That said, even taking into consideration this, we would judge the result as reassuring, especially given that Spain has been under the spotlight over the last few days due to reported strains in its banking system and its bleak fiscal outlook."
Spain's Treasury auctioned off 3 billion euros in 10-year bonds at an average interest rate of 4.86 percent, up from 4.045 in the last auction in May. It sold 479 million euros in 30-year bonds at an average interest rate of 5.9 percent, up from 4.8 percent in March.
The Treasury had hoped to issue between 2.5 billion euros and 3.5 billion euros in long-term debt.
The auctions were oversubscribed 1.89 and 2.45 times, respectively, suggesting investors retain an appetite for Spanish debt but demand a higher yield.
Markets welcomed the result, with the euro and stock markets rising.
Spain is adamantly denying persistent speculation that its troubled public finances and credit problems with its banks are pushing it toward some sort of rescue similar to the one given to Greece by the European Union and the International Monetary Fund.
Unicredit analyst Chiara Cremonesi said yesterday's auction went well, noting Spain had issued close to the maximum of the range announced and that demand was solid.
"Overall, all the elements point at a good result, although a note of caution comes from the fact that the amount sold was rather subdued if one considers that Spain sold two bonds," Cremonesi wrote. "That said, even taking into consideration this, we would judge the result as reassuring, especially given that Spain has been under the spotlight over the last few days due to reported strains in its banking system and its bleak fiscal outlook."
Spain's Treasury auctioned off 3 billion euros in 10-year bonds at an average interest rate of 4.86 percent, up from 4.045 in the last auction in May. It sold 479 million euros in 30-year bonds at an average interest rate of 5.9 percent, up from 4.8 percent in March.
The Treasury had hoped to issue between 2.5 billion euros and 3.5 billion euros in long-term debt.
The auctions were oversubscribed 1.89 and 2.45 times, respectively, suggesting investors retain an appetite for Spanish debt but demand a higher yield.
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