The Public Treasury has awarded 2,048 million euros in three- and nine-month bills in an auction held this Wednesday, in which it has reduced the interest paid for nine-month bonds by one hundredth of a time. According to data from the Treasury and collected by Efe, in nine-month bills it has placed 1,524.98 million euros among investors at a marginal interest of 3.7%, which implies a decrease of eleven basic points compared to the previous auction of the last July, when it placed it at 3.81%.
Regarding three-month bills, this department has distributed 523.04 million euros with a yield of 3.535%, with a minimal upward variation of four thousandths of a point compared to the previous month’s bid, since the marginal was set at 3.531%. Investors have demanded 5,351.9 million euros of these titles, 500 million euros.
The demand exceeded 3.6 times the awarded amount
Demand has exceeded 3.6 times the amount awarded in the case of three-month letters and almost 2.3 times the auction of nine-month securities. Last week, this body awarded almost 4,850 million euros in a six- and twelve-month bill issue in which it reduced the interest rate of one-year titles twelve hundredths, up to 3,682%, and raised it slightly, almost four hundredths. in the case of six-month debt, up to 3.665%.
After this auction and after suspending the planned bid for bonds and obligations next Thursday, the Treasury will not go back to the markets until September 5, with issues of 6 and 12-month bills.
Treasury targets for 2023
The gross issuance by the Public Treasury will be 256,930 million euros this year, which represents an increase of 8.2% compared to the estimate for 2022, due to the rise in interest rates. For its part, the net indebtedness of the Public Treasury in 2023 will remain at 70,000 million. Breaking down by type of instrument, the Treasury Bills are expected to provide negative net financing of 5,000 million, so the State bonds and obligations, together with the rest of the debts in euros and foreign currency, will contribute the remaining 75,000 million.
Upward trend in investor appetite
The expert of the securities firm XTB Manuel Pinto has indicated to Efe that “the upward trend in the appetite of investors for debt in Spain continues”, due to “the lack of alternatives in the markets”, to the possibility of that there will be “a halt in the rise in interest rates” by the European Central Bank (ECB) and the existence of some economic risks due to the situation in China, the increase in public debt or high interest rates.
Pinto has also commented that the interest on the bills has been lowered to nine months, but he has reported some peculiarity of this auction, which has resulted in “a slight inversion in the curve” of interest rates, since the interest on the bills at six months has slightly exceeded the profitability of 12-month bills (3.7% versus 3.682%, respectively).
Linksecurities analyst Juan José Fernández-Figares told Efe that the ECB could raise interest rates again at the end of the year (they are now at 4.25%), “so it is probable that the yields of the next bills issues may go up a little more in this period”.
For this expert, the interest of “the most conservative investors in issuing Treasury bills in the short term, especially in recent months”, is due to “the lack of low-risk alternatives, since banks have not yet They are remunerating customer deposits and, at the moment, we don’t expect them to start doing so actively.”
“The most conservative investors are betting on the issuance of Treasury Bills in the short term, especially in recent months”
Some of the comments of these experts are reflected in the increase in the holding of Treasury bills by individuals, which according to the latest available data provided by this department, has multiplied almost a thousand times from May 2022 to the same month of 2023. , going from 17 million to almost 15,000 million euros.
While the yield on short-term debt is falling, the opposite is happening in the secondary market with ten-year bonds, which in the last three weeks have presented their yields at annual maximums. In the Spanish case, it has gone from 3.4% to 3.7%, due to the contagion of the situation that the debt of other countries is experiencing and due to the existing doubts about general economic growth or the evolution of prices.
Regarding other data from this auction of bills, the demand has exceeded 3.6 times the amount awarded in the case of three-month bills and almost 2.3 times the auction of nine-month bonds. Last week, the Treasury awarded almost 4,850 million euros in a six- and twelve-month bill issue in which it reduced the interest rate of one-year titles twelve hundredths, up to 3,682%, and raised it slightly, almost four hundredths, in the case of six-month debt, up to 3.665%.
After this auction and after suspending the planned bid for bonds and obligations next Thursday, the Treasury will not go back to the markets until September 5, with issues of 6 and 12-month bills.
