Spanish Sovereign
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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. -
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.
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A European sovereign mandated banks on Tuesday to sell a long dated euro bond, the first benchmark in the currency so far this week.
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Italy hit record low yields at auction and Spain paid a tenth of a basis point to place bills amid strong signs that Greece will receive a bail-out extension.
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The proximity of a deal to extend Greece’s credit lifeline compressed eurozone periphery spreads on Monday, boding well for a flurry of auctions and a potential syndication this week.
