MADRID Nov 22 Spain's social security reserve
fund will subscribe to a new 3.3 billion euros ($4.2 billion)
sovereign bond as the government seeks pre-funding for a likely
tough 2013 while markets remain relatively calm.
The 5-year bond carries a 4.75 percent coupon and the sale
by private placement will close on Monday, the Treasury said in
an announcement in the Official Gazette.
Spain's government is taking every step it can to sell debt
since borrowing costs have come down in the two months since the
European Central Bank announced it was standing by to support
bond prices if countries like Spain ask for aid.
Spain's high deficit and weak economy - and the problems its
banks and 17 autonomous regions have had in financing themselves
- are at the centre of the euro zone debt crisis.
Spain's social security system is set to register a deficit
of 10.5 billion euros in 2012 compared to an initial forecast of
a balanced budget, according a document sent to the European
"As long as the sentiment and environment remain
constructive they're just trying to get as much paper out as
they can," said Michael Leister, strategist at Commerzbank in
London. "Once again it shows that the Treasury is quite
opportunistic in exploring these possibilities once they arise."
Spain has made two other recent private debt placements. In
September and October the Treasury placed close to 9 bllion
euros with banks to finance a liquidity fund set up to help the
country's regions to meet debt payments.
Jo Tomkins, an analyst at 4Cast consulting firm, said that
while the placement could raise some eyebrows from the public,
it was not significant for markets.
"If anything the buyer is a longer-remit investor and hence
will probably hold the bonds and not sell them off at any given
opportunity which cannot be said for banks et al," she said.
As of September Spain's public administrations held 13.5
percent of the country's outstanding sovereign debt, according
to Bank of Spain data.