* Spain sells 4.5 billion euros of debt at triple-bond sale
* Average yields lower on all three bonds
* Spain has sold more than 34 percent of 2013 bond issuance
By Paul Day
MADRID, March 21 Spain sold more than planned at
a bond auction on Thursday at yields slightly below those paid
at sales over the last month, with investor appetite undimmed by
the financial crisis in Cyprus.
The Treasury sold 4.5 billion euros ($5.8 billion) at the
sale of three maturities, including the 10-year benchmark,
beating the top end of its target range of 3 to 4 billion euros.
"It's a very good auction ... Contagion fears for the time
being are not materialising and we believe this is going to
continue," rate strategist at Commerzbank in London Michael
Spain has now sold more than 34 percent of its total 2013
goal as it makes the most of renewed investor appetite in
high-yielding debt, backed by the European Central Bank's pledge
last summer to do whatever was necessary to protect the monetary
Cyprus has faced the prospect of bankruptcy since Tuesday,
when its parliament voted unanimously against a levy on bank
deposits and continues to search for a new plan to find billions
of euros to qualify for European aid.
But Spain's dire economy, which is not expected to emerge
from its more than a year-long recession until next year,
massive unemployment and high deficit have become less of a
worry for investors since the ECB plan to buy distressed
"(The sale has) gone very well. Clearly there is no Cyprus
angst or Italy angst in that sale. They sold more than they were
targeting," said Marc Ostwald, strategist at Monument Securities
"It is basically people reaching for yield. You can't make
any returns in Bunds, or in gilts or in Treasuries."
The risk premium investors demand to hold Spanish over
German debt fell sharply after the auction, to around 347 basis
points, a long way from euro-era highs last July of around 650
On Thursday, the Treasury sold 1.2 billion euros of a bond
due March 31, 2015, at an average yield of 2.275 percent
compared to 2.540 percent when it last sold Feb. 21. The bond
was 4 times subscribed after 3.7 times in February.
The bond maturing Jan. 31, 2018 sold 1.0 billion euros,
while yields fell to 3.557 percent from 3.572 percent just two
weeks ago, with a bid-to-cover ratio of 3.6 compared to 2.3
The yield on the longer-dated, benchmark bond, due Jan. 31,
2023 was 4.898 percent compared to 4.917 percent at the
beginning of March, with demand outstripping supply by 1.9 times
compared to 2.3 times previously.