The Treasury raised the initial number for its first large bond placement of the year by 30% yesterday after detecting record demand. It ended up issuing 13,000 million euros, which is the largest operation of this type to date, only surpassed by one in April 2020. Yesterday's success is at least partly on track for the year as a whole.
Of the 256,846 million euros of public debt that this year the State must seek in the markets, 70,000 million euros correspond to new issues, which are what are at stake.
The Secretary General of the Treasury, Carlos Cuerpo, recently announced that the objective would be to place them in the first half of the year to take advantage of the good moment in the market, in which investors are very interested in public debt.
Yesterday was the first major acid test, with the launch of a new 10-year syndicated bond with a starting amount of 10,000 million euros. The demand was equivalent to more than 86,000 million euros, also the second largest in recent history. Treasury sources consider that what happened "shows the very good access to capital markets and the confidence of international investors in the Spanish economy."
Another of the peculiarities of the placement was the high interest of international investors, who bid for 90% of the total, with the United Kingdom and Ireland leading the way.
The result was the placement on the same day of almost a fifth of all the net debt issuance scheduled for 2023 at a price of 3.17%, lower than the starting price, . The average cost of outstanding debt is 1.73%.
The anticipation strategy in debt placements also responds to the foreseeable rises in interest rates by the ECB, which has withdrawn its plans to purchase sovereign bonds and this year will continue to reduce the system's liquidity. Banks and other investors are buying public debt to adapt their portfolios to the new scenario.
The Treasury has set itself the objective of placing two thirds of the issues for the year in the first part of the year. It will do so, according to what it says, from a "conservative" perspective, in search of longer-term issues to extend the life of the debt and diversify investors. "We will go party by party, like the ECB," said the Secretary General of the Treasury.
