Spanish Sovereign

The threat of contagion from Greece stumbling towards a eurozone exit has started to re-emerge as a threat to other periphery countries, as issuers this week sold paper at yields last seen nearly a year ago.

Spain’s 10 year borrowing cost reached its highest level at auction in almost a year on Thursday, despite the sovereign’s yields falling in secondaries after hitting a year-to-date high on Monday.

Spain’s short term borrowing costs bounced out of negative territory on Tuesday, as the country readied itself for a bond auction amid a tricky euro market later in the week.

A tantalising glimpse of a final resolution to Greece’s negotiations with its creditors sent periphery eurozone yields plunging on Wednesday, ahead of an Italian auction on Thursday.

Spain’s Electricity Deficit Amortisation Fund (FADE) has mandated banks for a first syndication in over a year — despite periphery eurozone yields suffering a rocky week.

A Spanish agency is considering entering what has been a tricky euro market — in which the Spanish sovereign suffered a yield hike at auction on Thursday.

Spain’s nine month borrowing costs dipped below 0% at auction for the first time on Tuesday, as eurozone government bonds enjoyed strong demand in the secondary market during the morning.

Italy has closed a long dated private placement — its second this month — as Portugal and Spain cue up auctions for the coming days.

The prospect of European Central Bank quantitative easing failing to suppress eurozone borrowing costs sent panic through the sovereign, supranational and agency sector this week amid a savage sell-off across European debt markets.

Spain is likely to pay higher borrowing costs than at any point this year at an auction on Thursday, as a volatile period for eurozone government bonds rumbles on from last week.

Portugal is looking to take advantage of improving sentiment around Greece with a dual tap — but not every periphery issuer has been able to capitalise on events in Athens.

The Greek government’s tapping of state enterprises for cash this week staved off fears of imminent default — but other periphery issuers may still speed up supply as worries persist.