The Public Treasury expects to place between 1,500 million and 2,500 million euros this Tuesday in an auction of 3 and 9-month bills, according to the objectives announced by the body dependent on the Ministry of Economy.
In the last issue of this type, the Treasury placed 1,997 million euros and did so by cutting the remuneration offered for both 3 and 9 months.
Specifically, the Treasury placed 502.41 million euros in three-month bills, compared to a demand of 1,658.03 million euros, offering a marginal profitability of 3.538%, below the previous 3.620%.
In the auction of nine-month bills, the body dependent on the Ministry of Economy awarded 1,495.35 million euros, with requests of 2,915.97 million from investors, and the marginal interest was placed at 3.492%, also below the previous 3,510%.
Tuesday’s auction will be held after the Governing Council of the European Central Bank (ECB) recently decided to maintain interest rates, so that the reference rate for its refinancing operations will remain at 4.50%, while The deposit rate will remain at 4% and the loan facility at 4.75%.
In this way, the issuing institute has left rates intact for the third consecutive meeting since it stepped on the brakes at its October meeting, after carrying out ten consecutive increases in the price of money, which placed it at its highest level in more than 20 years.
Monetary policy decisions affect Treasury auctions, which in recent months have seen the remuneration offered to investors grow, in line with rate increases. This has caused interest in the purchase of debt to increase, especially in the case of the acquisition of Treasury bills by households.
Medium and long term debt
For its part, on Thursday, February 15, the Treasury will return to the markets to place between 5,000 million and 6,000 million euros in an auction of State bonds and obligations, the last one to be held this February.
Specifically, the organization will place 3-year State bonds, with a coupon of 2.50%; 5-year State bonds, with a coupon of 3.50% and State obligations with a residual life of 9 years and 5 months and with a coupon of 2.35%.
The reference yields for this auction are 2.811% for 3-year State bonds; of 2.628% for 5-year State bonds and 3.985% for State obligations with a residual life of 9 years and 5 months.
Thus, on Thursday the auctions of a month marked by the issuance of 6,000 million in a new 30-year syndicated bond will end, with a demand greater than 83,700 million euros, the highest figure for an issue for this term.
Program for 2024
The Treasury has already issued 40,846 million euros in just over a month of the year, 23.6% of its medium and long-term financing program for 2024. The average life of the State debt in circulation reaches 8 years and the average cost of the portfolio is 2.1%.
Overall, the Treasury’s 2024 financing strategy foresees new financing needs of around 55 billion for this year, which represents a reduction of 10 billion compared to 2023.
For its part, the expected gross issuance will amount to 257,572 million euros, 2% higher than that of 2023 due to the increase in amortizations, and the bulk will be covered by the issuance of medium and long-term instruments with the objective of maintaining the average life of the public debt portfolio.
Within the Treasury strategy for 2024, it is planned to once again use the indications for the issuance of certain references of State Obligations.
Other objectives for 2024 will be to maintain the diversification of the investor base and commit to the issuance of green bonds as a structural element of the financing program, thus reinforcing the sustainable finance market in Spain.
