• Gross issuance is reduced to 239,369 million in 2015, mostly in the medium and long term and below the previous year
  • The average cost of issuance has fallen by half in 2014, to 1.52%, and has been at minimums of the euro era
  • The objectives for this year continue to reduce costs, extend deadlines and diversify the investment base

The Public Treasury has announced the financing strategy for 2015, a year in which it will make a net issuance of 55,000 million euros, the same as the previous year. The gross issue will amount to 239,369 million euros, below the previous year, of which 141,996 will be in the medium and long term. Despite not increasing its net issuance, the Treasury will assume this year in its program the financing needs of the Autonomous Communities (CCAA) and Local Entities (EELL) that adhere to the measures of Royal Decree-Law 17/2014.

The objectives of the year that has just begun are based on the successful fulfillment of the strategy set in 2014. Net financing has stood at 55.641 million euros, almost 10,000 million below what was planned at the beginning of the year, and the gross has amounted to 241,333 million euros. The average cost of issuance in 2014 has fallen almost in half, from 2.45% to 1.52%, and the cost of outstanding debt has been 3.48% at the end of the year. Both figures are the lowest in the recent history of the Treasury. The good situation and the improvement of the confidence in Spain on the part of the investors have allowed this reduction of the cost and at the same time to extend the half life of the Debt of the State in circulation until 6.28 years.

In addition, good market conditions in 2014 have allowed the Public Treasury to reduce the initially expected maturities in 2015, especially high because the public issuer had to concentrate in 2012, during the worst stage of the crisis, its emissions in the tranche of three years. The main tool used to reduce the maturity profile has been to issue a lower volume of Treasury Bills in 2014 than originally planned, offsetting it with a higher medium and long-term issue. In this way, greater depreciation of those initially considered has been faced in 2014, which makes it possible to approach this year with greater comfort.

For 2015, the Treasury persists in the objectives of lowering the cost, maintaining or extending the average life and diversifying the investor base. Maintains the appeal to the market in net terms, up to 55,000 million euros, which will allow to assume financing needs of the Territorial Haciendas, including the maturities of national bank loans. These new financing tools for CCAA and EELL, which aim to facilitate the objectives of budgetary consolidation thanks to a more efficient management of Public Debt issues, will allow a global saving of interests for all Public Administrations.

The gross financing of the Treasury in 2015 will amount to 239,369 million euros, of which 141,996 will be in the medium and long term, a figure that is 264 million less than in 2014. The issuance of Treasury Bills will be 97,323 million euros, about 1,730 million less than the previous year.

The pattern will not be modified in the ordinary auctions of bonds and nominal State Obligations with fixed coupon. As a general rule, these ordinary auctions will take place on the first and third Thursday of each month. In order to be able to adjust the amount issued to the demand of the auction, the Treasury will announce a range as an emission target, so that the expected emission volume is close to the central part of the range. The amount issued to the highest or lowest part of the range will be modulated based on the interest rates bid and other market circumstances or the Treasury issuance program.

This year the Treasury will continue to develop its Bond and Obligations program indexed to European inflation, which meant an innovation in the issuance program last year and that allow diversifying the investor base of Spanish debt. As a novelty, these products will be incorporated into regular auctions, with the aim of providing these references with greater liquidity and giving investors greater access to these financial products.

In addition, as in previous years, the Treasury will have the option to call special auctions, outside the usual calendar, to provide certain references with liquidity and thus improve the functioning of the secondary market. The possibility of resorting to bank unions to place the debt is also foreseen, although auctions will continue to be the main method of issuing State Debts. Likewise, the Treasury may also issue Debt through private placements in which a security is issued directly to an investor, at favorable cost conditions for the State.

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