• The acting Minister of Economy and Business, Nadia Calviño, today announced the reduction in the additional 10,000 million euros of the Treasury's net issuance for 2019. This reduction, together with the 5,000 million announced in April, will allow the net issuance this year be the smallest since 2007
  • For the first time since 2011 the gross issuance will fall below 200,000 million euros annually
  • The progressive reduction of the financing needs of the Treasury will contribute to the objective of reducing the weight of the public debt on GDP
  • Financing costs continue to decrease and record new historical lows. The interest rate of the issuing debt is 0.37% and the average cost of the live debt stock is 2.29%

The acting Minister of Economy and Business, Nadia Calviño, announced today that the Public Treasury will reduce the volume of net issuance planned for 2019 by an additional 10,000 million euros. This reduction, together with the one announced in April of 5,000 million, will place the net issuance in 20,000 million. This figure represents a reduction of 42.9% over that estimated at the beginning of the year and is the lowest net issue since 2007.

The planned gross emission is also reduced by the same amount, for the first time since 2011 below 200,000 million euros. Specifically, the planned gross issuance will amount to 194,525 million euros, 8.7% lower than in 2018.

This new reduction is made possible by the good evolution of the financing costs of the Treasury and by the confidence of investors in the Spanish economy, which has resulted in a sustained reduction of the risk premium since the beginning of the year.

Likewise, the more efficient management of the State treasury and the improvement of the finances of the Autonomous Communities, which has allowed them to regain access to the market, are other factors that have contributed to reducing the financing needs of the Treasury.

The lower financing needs allow an estimated saving of more than 2,000 million euros

The reduction of the emissions will allow an estimated saving in the payment of interest on the forecast at the beginning of the year of more than 2,000 million euros. In terms of GDP, the State interest burden will close 2019 below 2%, compared to 2.14% in 2018 and 0.9 tenths less than the maximum, 2.82%, which was reached in 2014.

The Government expects the public deficit to be reduced to 2% in 2019, registering for the first time since 2007 primary surplus. The reduction of the deficit, together with the lower financing costs will help to continue reducing the ratio of public debt to GDP.

Financing costs continue to decrease and record new historical lows

In 2019, the financing costs of the Treasury continue to be lowered, which record new historical lows, with an interest rate of the outstanding debt of 0.37% and the average cost of the stock of living debt that currently stands at 2.29 %.

These declines have occurred in an environment of high demand for Spanish public debt. This is shown by the average coverage ratio of Treasury auctions, which relates total demand to the amount issued, which has increased from 2.49 of 2018 to 2.86 so far this year.

Meanwhile, the average repayment terms remain in line with the main European issuers and stand at 7.55 years compared to 7.45 at the end of 2018.

New 50-year bond issue

In the morning of today the Treasury has made a new auction of Bonds and Obligations at 5, 10 and 50 years, as well as a bond linked to inflation due in 2030. In all issues interest rates have been obtained Historical lows

In the case of the 50-year obligation, which was last issued in November 2018, about 1,000 million euros have been issued at a marginal rate of 1.46%, compared to 3,036% to which the year was issued past. Ten years ago, 1,685 million were awarded at a marginal rate of 0.19%, compared to 0.31% of the last auction held in August, and 5 years ago a total of 856 million were issued, at a negative marginal rate of -0.32%, compared to -0.25% which was awarded in August.



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