Spanish Sovereign

Periphery eurozone sovereigns shrugged off difficult conditions in parts of European periphery bond markets — caused by concerns over the fortunes of Banco Espírito Santo — at a series of auctions on Thursday, while a Spanish region was able to print a privately placed tap. Tricky conditions for peripheral syndications could create more opportunities in the private market, said MTN dealers.

The Community of Aragon made it a second day of success in a row for Spanish regions, with a three year bond that was more than three times oversubscribed and matched the spread compression achieved by a Madrid deal on Monday. Greece could make it a triple whammy for the periphery this week if it comes with a much rumoured three year deal.

The Community of Madrid printed a new July 2023 bond through its curve and overshot its maximum size target on Monday, as bankers said that the deal could signal a series of trades from its Spanish regional peers.

The Community of Madrid is planning a syndication that could come as soon as next week, according to a funding official at the region’s ministry of finance.

This week's scorecard covers the funding progress of sovereign issuers, with most issuers moving into the second half of their funding programmes. Next week's scorecard will deal with European supranationals and agencies.

Read on to see how selected benchmarks are faring in secondary. Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.

Italy will attempt to reduce its 2015 funding requirement on Friday with an exchange offer a little over a week after Spain launched a similar operation.

Cyprus wasted no time in mandating for a comeback bond, hitting screens on Tuesday afternoon after two days of investor meetings in London. Elsewhere, Spain — which auctions bonds on Wednesday — and Greece enjoyed stellar conditions in bills sales.

Spain feasted on rampant demand for eurozone periphery in the wake of the latest dovish moves from the European Central Bank by printing a €9bn October 2024 bond on Thursday — but also drew plaudits for the innovative structure of the deal.

Spain is set to become the first eurozone periphery sovereign to test benchmark demand since the European Central Bank brought a series of new dovish measures to the market last week. The sovereign mandated banks for a new benchmark amid strong auctions elsewhere in the periphery on Wednesday afternoon.

Eurozone periphery sovereigns are set to waste no time in taking advantage of a sharp tightening in their spreads in the wake of last week’s European Central Bank meeting, with a series of auctions in the pipeline over the next few days and Spain rumoured to be considering a new 10 year benchmark.

There can be few doubts that eurozone periphery yields are going to keep on their almost relentless journey downwards since the start of the year after Mario Draghi delighted the finance world with a series of measures that only the most optimistic of market watchers could have predicted. But with more and more investors starting to take profits as pricing recovery catches up with real economics, there may well be at least a slowdown on the cards.