The Treasury expects to place up to 5.5 billion this Tuesday in the first auction of November
He Public Treasury Spanish will inaugurate the auctions for the month of November this Tuesday with an issue of six and twelve month bills in which it hopes to place between 4.5 billion and 5.5 billion eurosin accordance with the objectives announced by the agency dependent on the Ministry of Economy.
This will be the first auction to be held after the latest decision of the European Central Bank (ECB) to keep interest rates unchanged at 2%. As the markets took for granted, the ECB has chosen to continue waiting after having stopped in June the easing cycle thatcut the price of money by 200 basis points through eight downward adjustments, the last seven consecutively.
In this framework, the Spanish Public Treasury will inaugurate the issues for the month of November with a auction of six and twelve month bills. In the last issue of this type, the organization placed 5,632 million and did so by raising the profitability offered to investors by 12-month bills above 2%, but cutting the interest for the reference to 6 months.
Specifically, the six-month marginal interest was placed at 1.958%somewhat below the 1.976% offered in the previous auction of this same type of paper, while the twelve-month profitability rose, in this case, from the previous 1.996% to 2.021%.
After this broadcast, The Treasury will return to the markets next Thursday, November 6, with an auction of State obligations, in which it hopes to place between 4,250 million and 5,750 million euros.
Specifically, 7-year State bonds will be issued, with a 3% coupon; State obligations, with a residual life of 9 years and 9 months, with a coupon of 1.85%; State obligations indexed to 10-year euro zone inflation, with a coupon of 1.15% and 15-year State obligations, with a coupon of 3.50%.
The reference marginal interest rates for this auction are 2.929% for 7-year State obligations; at 3.420% for State obligations with a residual life of 9 years and 9 months; at 1.494% for 10-year euro zone inflation-indexed State obligations; of 3.676% for 15-year State obligations
After these two issues, the Public Treasury will return to the debt markets on the day November 11, with an auction of 3 and 9 month billswhich will be followed by another on the 20th, of bonds and obligations of the State, with which the month will close.
Financing program
At the end of September, the Public Treasury announced a cut in its financing needs for this year by 5,000 million euros given the “strength” of Spain’s economic growth, so its Net debt issuance passes 60 billion initially planned at 55,000 million.
Currently, the average cost of outstanding debt currently stands at 2.28%. This is, just 64 basis points from its all-time low of 1.64% in 2021, barely a quarter of the accumulated increase of 250 basis points in official interest rates in the same period.
On the other hand, the average cost of issuance is reducing in recent months, converging to the average cost of outstanding debt and limiting the upward path of the latter. Thus, the average issuance cost for 2025 until the month of August stands at 2.75%, below the 3.16% of last year.
All of this has contributed to the financial burden of the State debt on GDP remaining contained, around 2%, close to its minimum of 1.88% in 2021 and far from the maximum of 2.92% recorded in 2014highlighted the Ministry of Economy.
Diversification of the investor base
In 2025, the Treasury has also maintained the objective of diversifying the investor base and has continued betting on the issuance of green bonds as a structural element of the financing program, thus reinforcing the sustainable finance market in Spain.
To this end, the Treasury has continued to reopen the green bond issued in 2021 with the aim of achieving a volume similar to that of the rest of the Treasury curve references and continue contributing to the financing of projects for the ecological transition.
In total, 48 ordinary auctions of bills and bonds and State obligations are planned. Furthermore, in 2025 the Treasury will once again resort to syndications for the issuance of certain references of State Obligations.
