MADRID Jan 16 Spain sold more debt than planned
at a triple bond auction on Thursday, taking advantage of
falling borrowing costs and sustained investor appetite for its
debt as a tentative economic recovery gathered pace.
The Treasury started to front-load its annual issuance
programme by selling 5.92 billions euros of bonds due in 2017,
2026 and 2028, above the target range of 4.5 to 5.5 billion
Demand for the mid- and long-term paper, albeit strong, was
lower than at the most recent auctions while yields fell on the
2017 and 2026 bonds but were slightly up on the 2028 one.
Spanish debt has been supported since mid-2012 by a European
Central Bank pledge to defend the euro, consistently low returns
on higher-ranked debt and signs in recent weeks that the
country's economy is turning the corner.
Government officials in Madrid said this week that despite
subdued domestic consumption and high unemployment, the recovery
was building up at a faster pace than expected and that 2014
growth forecasts would likely be revised up.
In another sign economic activity was improving, the world's
second-largest retailer Carrefour said sales in Spain
returned to growth in the fourth quarter for the first time
Sales rose 0.2 percent like-for-like in the firm's
third-largest market, supported by a Christmas bonus to civil
servants being paid this year after having been suspended in
Labour Minister Fatima Banez said on Thursday at a
parliamentary hearing the labour market had bottomed out and
fewer jobs were being destroyed.
"We hope to see very soon, in the next few weeks, positive
year-on-year data on job creation for the first time since the
crisis started," she said.
LOT TO BE DONE
Economy Minister Luis de Guindos, while saying growth was
picking up, cautioned a lot remained to be done for the recovery
to be felt by everybody in Spain.
He announced he would soon travel to London, New York, Tokyo
and Hong Kong to meet potential investors in Spanish debt.
Analysts and traders said Thursday's auction had been solid
although they were less impressed by the results than at a
similar sale last week.
"Demand was not as high as at the last auction because, like
the Italians, they sold more volume on the shorter-term bonds to
take advantage of their lower costs," said Banco Sabadell trader
"On a 1 to 10 scale, the auction is worth an 8 grade. It was
not as stunning as the last one but investors' appetite for the
The Treasury sold 2.66 billion euros of the 2017 bond at an
average yield of 1.595 percent compared with 2.182 percent when
it last sold on Dec. 5. The bond was 2.2 times subscribed after
3.6 times last month.
The 2026 bond sold 1.81 billion euros at 3.977 percent after
4.469 percent on Nov. 7, with a bid-to-cover ratio of 1.4 after
2.4 at the previous auction.
The 2028 bond sold at 4.199 percent, up from 4.192 percent
on Jan. 9. The Treasury sold 1.44 billion euros of the paper
which was 2.0 times subscribed compared to 2.7 last week.