Treasury issues 6 billion euros in 30-year term, with new record demand

Feb 8, 2024 | Current affairs, Featured, Revista Lloseta, Thursday Daily Bulletin, Tradition

High participation of high-quality investors, with a significant volume allocated to insurance companies, pension funds and official institutions.

Tesoro Público has executed the second syndicated issue of the year with a new 30-year Obligación del Estado, maturing in October 2054. 6,000 million was issued, with a demand of over 83,700 million euros, the highest ever for a Treasury issue at this maturity, obtaining an oversubscription of 14 times the amount issued.

TDB keeps you informed. Follow us on FacebookTwitter and Instagram

Treasury issues 6 billion euros in 30-year term

This high demand, together with the high participation of international investors, which exceeded 91% of the total issue, evidences the strength of Spanish public debt and the confidence of investors in the Spanish economy and its long-term performance, especially relevant in the context of gradual withdrawal of the European Central Bank.

In addition, this strong investor interest has allowed the initially announced spread to be reduced by 3 basis points to 11 basis points over the yield of the current 30-year benchmark. As a result, the bond issued today, which matures on October 31, 2054, has a coupon of 4% and the yield is 4.002%.

The quality and diversity of the investor base in the allocation of this new government bond is noteworthy, with demand distributed among 461 investor accounts, highly diversified both geographically and by type of investor. Non-resident investors accounted for 91% of the total. The United Kingdom and Ireland stood out with 21.5%, France and Italy with 17.1%, Germany, Austria and Switzerland with 15.7% and the Scandinavian countries with 10.8%. Other European investors accounted for 16.9% of the allocation. The Middle East accounted for 4.6%, Asia for 2.1%, and the United States and Canada for 1.4%. The weight of other investors was 0.9%.

By type of investor, fund managers accounted for the largest share, with 26%, followed by insurance companies and pension funds, with 22.6%, bank treasuries, with 17.6%, and other banking services entities, with 11.8%. Central banks and official institutions participated with 11.3%, leveraged funds with 4.3%, and other investors accounted for 6.4%.

With this syndication, the Treasury has already issued €40.846 billion in just over a month, 23.6% of its medium- and long-term financing program for 2024. The average maturity of outstanding government debt is 8 years and the average cost of the portfolio stands at 2.1%.

BBVA, Banco Santander, Citi, JPMorgan, Morgan Stanley and Société Générale acted as managers of this issue. The rest of the Bonos y Obligaciones del Estado Market Makers group acted as co-managers.