The Public Treasury has managed to capture 1,844.45 million euros in the long-term debt auction held this Thursday, the last of November.
Despite the fact that the placement has been in the expected low range, investors maintain, despite the crisis and the downward revisions of the growth forecasts for Spain by different organizations, their confidence in Spanish securities, since the demand has reached 6,231.5 million euros, which is 3.4 times more than what was finally awarded. In addition, the Treasury has charged more for both papers.
Specifically, the Public Treasury has issued 1,357 million euros with the 5-year bond, compared to a demand of 2,717 million euros, and has registered a marginal interest rate of -0.395%, more negative than the reference of -0.325 % of the emission from October 15, which is why it marks its lowest level in history.
Likewise, with the 7-year obligations (maturity on July 30, 2027), the Treasury has placed 487.45 million euros, compared to requests of 3,517.5 million euros, and in this case it has also notably deepened in negative rates, standing at -0.260%, compared to the -0.033% reference on 17 September.
In the last auction, held last Tuesday, it placed 1,020 million euros in bills, within the expected average range, and did so by charging investors less in the three-month reference and maintaining negative rates at nine months, in a context historical lows in the profitability of the last auctions and optimism in the markets due to the news about the advances of the Pfizer and Moderna vaccine.
With today’s issuance, the agency closes the November calendar and will not return to the markets until December 1, to face the last month of an exercise marked by the Covid-19 pandemic that has forced the review of the financing strategy of the Kingdom of Spain.
Specifically, it was revised upwards by 100,000 million in May as a result of the greater needs due to the Covid-19 crisis, but it was changed again in October to be reduced by 15,000 million.
The Secretary General of the Treasury and International Financing, Carlos San Basilio, explained that the cost of issuing public debt will be at 0.20% at the end of the year, below the current 0.22%, while the charge interest on debt will exceed 2% of GDP this year, although it will subsequently return to a downward trend.
After the last revision of the program, net issues remain at 115,000 million and gross at 282,137 million. After this reduction, the gross financing needs until the end of the year go from 47,000 million to 32,000 million.
Of this amount, the organization expects that approximately 10 billion will be covered with the new European unemployment aid instrument SURE in 2020, once the European Commission has announced the start of its issuance program.
Those funds will be directed to cover the programs implemented to moderate the impact on employment of the coronavirus pandemic. The rest of the funds allocated to Spain will be received in 2021, until reaching the approved 21,325 million euros.