Spanish Sovereign

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.

Investors mobilised this week, revolting against the European Central Bank’s quantitative easing programme, forcing eurozone periphery sovereigns to fund themselves at yields that predate central bank buying for the first time since the ECB’s public sector purchase programme began last month.

Spain highlighted on Thursday the retracement in yields since the launch of eurozone quantitative easing, as it paid to borrow at pre-QE prices.

Spain crunched its long term borrowing costs on Thursday at its first 30 year auction since the European Central Bank launched its public sector purchase programme.