Spain hits target with 2.5-billion-euro bond sale

[MADRID] Spain sold 2.5 billion euros (US$2.8 billion) of bonds at a triple auction on Thursday, with yields rising slightly on some maturities ahead of a European Central Bank meeting at which policy makers are expected to refrain from further stimulus.

The Spanish treasury hit its mid-range target of between 2 billion and 3 billion euros in the sale, and it has now issued about 37 per cent of its year-end medium and long-term issuance target.

Yields across the euro zone were higher on Thursday, though political uncertainty is also keeping investors on their toes.

Spanish political parties have little more than a week to reach an agreement on a government coalition, or another election will be triggered after an inconclusive ballot last December.

Spain sold 1.3 billion euros of a 5.9 per cent 10-year bond maturing on July 30, 2026, at an average yield of 1.608 per cent. That paper had not been issued within the past year, but another April 30, 2026 bond with a 1.95 per cent coupon sold at a yield of 1.496 per cent when it was last auctioned on April 7.

The Spanish Treasury also sold 660 million euros of a July 30, 2032 bond for 2.116 per cent, compared to an average yield of 2.059 per cent when it was last issued in March. Demand outstripped the offer by 1.6 times compared to 2.5 times at the last auction.

Spain also issued 574 million euros of a 4.7 per cent bond due July 30, 2041 at an average yield of 2.654 per cent and a bid-to-cover ratio of 1.6 times. That compared to a yield of 3.177 per cent and a bid-to-cover ratio of 1.4 times in July last year.

REUTERS