Treasury issues 10 billion euros at 10 years at the lowest cost ever at this term

2021.1.13

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The high initial demand, which exceeded 130 billion euros, allowed the Treasury to adjust the cost of the operation to the maximum, reducing to half the spread offered vis-à-vis the reference bond. The final demand was adjusted to around 55 billion euros, higher than the demand for the syndicated issue at the same term in January 2020, before the start of the first general lockdown in March of that year.

The final demand was distributed among 292 investment accounts of a very diversified nature and of very high quality. Non-resident investors achieved a share of 79.4% of the operation, which clearly shows their confidence in the Spanish economy. Of this percentage, the United Kingdom and Ireland stood out, with a 15.4% share, France and Italy with 14.7%, Germany, Austria and Switzerland with 9%, the Scandinavian countries with 8.5% and other European investors with a total of 13.6%. For its part, Asia took an 11.5% share of the transaction, more than usual in these syndicated issues, while the Middle East reached a share of 4.3% and the United States and Canada of 2.1%. Other investors took 0.3% of the issue.

By type of investor, the largest share corresponded to fund managers with 44.6%, followed by bank treasuries with 20.8%, insurance companies and pension funds with 15.8%, and other banking services with 6.3%. Central banks and official institutions took a 6.3% share, leveraged funds a 5.5% share, while other investors accounted for 0.7%.

The bond issued on Thursday matures on 30 April 2031 with a coupon of 0.1%. The yield stood at 0.114%, equivalent to 4 basis points above the current reference rate at 10 years (State Bond with maturity in October 2030).

In order to tackle the impact of the crisis stemming from COVID-19 and to implement the Recovery, Transformation and Resilience Plan, the Public Treasury is proactively accelerating its financing programme. Following this syndicated loan of 10 billion euros, the Treasury has now issued a total of 23 billion euros in the year to date at a negative cost of -0.08%. This means that the average cost of the Treasury portfolio of securities has recorded a new historic low, which stands at 1.83%. Meanwhile, the average life of the outstanding State debt amounts to 7.77 years.

Banco Santander, BBVA, Citigroup, HSBC, JP Morgan and Société Générale have acted as lead managers of this issue. The rest of the group of Market Creators of State Bonds and Debentures have acted as co-managers.

Non official translation