Spanish Sovereign
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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.
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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.
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A promise by the Greek government to honour an imminent debt helped tighten periphery eurozone spreads on Tuesday before a series of auctions — including one where Spain followed Ireland into negative yields.
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Spain is open to taps of its longest outstanding bond, a 50 year private placement, but demand may be limited, say bankers.
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Spain this week ended a run since the beginning of the year of eurozone periphery countries raising books of over €10bn — but sovereign debt bankers were reluctant to call time on the strong bid for the issuers.
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Spain’s short term borrowing costs tore down to near zero on Tuesday as the country received approval to pay back cash to the European Stability Mechanism early.
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Spain halved its three year borrowing costs and cut more than a third from its five year yield at auction on Thursday.
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Madrid has raised 15 year cash with its second bond in as many weeks — and the borrower’s sovereign could break its yield record at a similar tenor on Thursday.
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Spain brought a record breaking 15 year benchmark this week that may have helped drive other eurozone sovereign yields to all-time lows.
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Spain scored its lowest coupon and biggest deal in the 15 year part of the curve on Wednesday, as eurozone periphery sovereigns enjoyed enviable conditions.
