The fourth auction of Treasury Bills so far this year has closed with a strong demand, equivalent to 3.25 times the offer, according to sources from the organization. In this auction, which, like the previous ones, has been held on Tuesdays, bills for three and nine months have been placed.
In total, Tesoto has awarded 1,959 million euros, for which purchase offers have been submitted for 6,300 million euros. From the Treasury, they highlight the continuation of the strong interest of retail investors, who in the previous auction, the one last week, presented requests for close to 1,200 million.
On this occasion, non-competitive bids, which are those in which only the desired quantity is indicated and which are usually attributed to private buyers, have amounted to approximately a quarter of the issue.
The profitability of the 3-month bills has remained at a marginal rate of 2.52%, while the nine-month bills have been awarded at a marginal rate of 2.97%. Last week, the six- and nine-month bills were placed at an average rate of 2.81%, below the 3% and also the 2.98% of the previous issue, in January.
The strong demand serves to reduce, at least for this product, the escalation of the cost of debt. Bill auctions have been preceded by enormous interest among individuals, who have queued at the Bank of Spain offices and resorted massively to purchases through the web, which has caused the computer system to collapse at times. In January requests were made for 900 million euros.
The interest accrued on the bills, which differ from bonds and obligations in that their maturity terms are shorter, are now the highest since 2012. Their profitability has increased with the rise in interest rates and the big question is now how far you can scale.
In the first Treasury auction in February, which was for 20-year State bonds, almost 6,500 million euros were placed at 3.5% interest. A few days earlier, at the end of January, the Treasury scored one of its greatest successes in debt placement by issuing 13,000 million euros in 10-year bonds with a record demand, close to 85,000 million euros. Most of the investors, close to 90%, were international.
This year the Treasury must issue 70,000 million euros in public debt and its objective is that at least two thirds of the effort be concentrated in the first half of the year, in which the strong demand will coincide with a more favorable interest scenario, since that it is foreseeable that the ECB will continue to raise rates. The State has gross financing needs for this year of 256,846 million euros.
