Spanish Sovereign

Spanish issuers rode on the back of a well received auction for their sovereign and diminishing concerns over eurozone reform to print a series of privately placed taps on Thursday. The relatively small size of the Spanish auction had played a crucial role in allowing the credits to print, said dealers.

The Kingdom of Spain rounded off a difficult year for bond issuance by selling more than its targeted amount at an auction on Thursday, including the first debt from a periphery eurozone issuer in the 30 year bracket in 2012. The Republic of Italy also hit all its targets in its penultimate bond auction of the year.

Spain announced its borrowing plans for 2013 on Tuesday, including plans for a very large increase in its net issuance of bills. Strategists are concerned that Spain will struggle to successfully execute its borrowing programme without official assistance, and that the emphasis on bills could lead to refinancing problems in 2014.

Spain sold €3.9bn of short dated debt on Tuesday, surpassing its maximum volume target. This was despite peripheral sovereign yields spiking on Monday after Italian premier, Mario Monti, announced at the weekend his intention to resign.

Spanish regions raised €35m of funding through privately placed taps this week but dealers were wary of calling the start of a trend as concerns linger over Spanish issuers.

The Kingdom of Spain failed to hit its maximum target at an auction on Wednesday, although it raised 10 year money at lower yields than a month ago. The auction followed an admission from the country’s treasury minister that it may not hit its deficit target for 2012.

Demand was buoyant for auctions of Italian and Spanish paper on Tuesday, after European politicians agreed a conditional deal in the small hours of that morning to ease Greece’s debt burden.

Instituto de Crédito Oficial and Comunidad de Madrid raised €135m via taps on Thursday as Spanish issuers rounded off a successful week for the troubled sovereign.

The Kingdom of Spain brushed off fears over its latest debt sale as it received bids of more than €2.5bn for paper maturing in April 2021 — beyond the reach of any secondary market assistance from the ECB — at auction on Thursday.

Instituto de Crédito Oficial cut through the din surrounding the ‘will it won’t it’ soap opera of Spain’s potential bailout to add another €100m to its 2013 prefunding on Wednesday.

Spain could be in line for another painful auction on Thursday despite being able to sell more bills than it originally intended at a sale on Tuesday, analysts have suggested.

Instituto de Crédito Oficial (Ico) tapped its five year debt on Wednesday, seeing larger participation from international accounts than has been the case with its recent issuance.