- Demand has reached 1,760 million euros and the marginal rate has reached 2,699%
The Spanish Public Treasury has today placed for the first time in an ordinary auction a 50-year obligation, 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 degree. Investors have requested 1,760 million euros and 1,126 have been placed, which means 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, three-way bonds have also been placed 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 investment appetite for these very long-term securities. The good reception sends a positive signal about the sustainability of the Spanish debt. The 50-year issues began in 2014, through a private placement. In 2016, the Spanish Treasury managed to launch a 50-year obligation for an amount of 3,000 million euros. Today is the first time that this type of issuance is inserted into the ordinary activity of the Treasury, which anticipates its possible future continuity.
After today's auction, the public treasury has placed 106,314 million euros, representing 88.4% of the forecast for medium and long-term issuance for 2016. The downward trend in interest rates translates into that the average cost of the issuance in 2016 is 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 interest on the debt in relation to the Budget, an amount that in 2016 will approach 2,000 million euros.
