ICO pays more as Spanish curve widens

Although the Greek situation has calmed down — the new 10 year is back at 354bp over mid-swaps compared with plus 405bp last Thursday — attention has switched to Spain where government bonds widened yesterday by 10bp, forcing Instituto de Credito Oficial to widen the spread on its new five year bond from the low 50s over mid-swaps to plus 65bp. At the new spread, which is 15bp back of Spain, lead managers Calyon, Credit Suisse and HSBC report a Eu1.5bn book for a Eu1bn deal.