- Demand has reached 1,760 million euros and the marginal rate has stood at 2,699%
The Spanish Treasury has today placed a 50-year obligation for the first time in ordinary auction, within the strategy of lengthening the average life of the debt and lowering costs. The placement has been a success, as evidenced by the high demand for such a long-term title. Investors have requested 1,760 million euros and 1,126 have been placed, representing a coverage ratio of 1.56. The marginal interest rate was 2.699%, notably lower than 3.493%, the rate at which this obligation was issued for the first time through a syndication in May 2016. In the same ordinary auction, bonds were also placed at three years with a negative marginal rate of -0.116%, reaching the historical minimum, and a 10-year obligation at a rate of 1.052% practically equivalent to the historical minimum reached in a 10-year auction that was 1.05%.
The decision to include a 50-year obligation in ordinary auctions responds to the perception of investor appetite for these securities in the very long term. The good reception sends a positive signal about the sustainability of Spanish debt. 50-year issues began in 2014, through a private placement. In 2016, the Spanish Treasury managed to launch a 50-year obligation by syndication for an amount of 3,000 million euros. Today is the first time that this type of issue is inserted into the ordinary activity of the Treasury, which anticipates its possible continuity in the future.
After today's auction, the Treasury has placed 106,314 million euros, which represents 88.4% of the issuance forecast for the medium and long term for 2016. The downward evolution of interest rates translates into The average cost of the issue in 2016 stands at 0.65%, the lowest in history. At the same time, the average life of the outstanding debt reaches, after this auction, 6.77 years. For the third consecutive year, the Treasury will save in interest on the debt with respect to the Budget, an amount that in 2016 will approach 2 billion euros.