* Spain to tap markets for up to 5 billion euros
* Triple-bond auction results due around 0940 GMT
* Demand seen high as yields ease on secondary markets
By Paul Day
MADRID, Jan 10 Spain's first debt sale of 2013
is likely to attract enough investors on Thursday to keep the
country's borrowing costs down despite its heavy financing needs
and the prospect of sustained economic recession.
The three bonds on offer include the first from Spain to
contain a collective action clause (CAC) intended to make it
easier to restructure government debt in a crisis.
The Spanish Treasury plans to raise a total of up to 5
billion euros ($6.5 billion) from this new bond, maturing March
31, 2015, and by reopening bonds due Jan. 31, 2018 and July 30,
From now on all new euro zone government bonds will carry
CACs, the first time such legal provisions have been included
routinely in a developed market. The Netherlands issued the
currency bloc's first such sovereign bond on Tuesday.
Spain's borrowing costs soared to euro-era highs in
mid-2012, easing only after European Central Bank chief Mario
Draghi said the bank could intervene in the debt market to help
countries that signed up for conditional assistance.
The yield on Spain's 2018 bond could ease by as much as 60
basis points from when it was last auctioned in November, based
on trading in the secondary market on Wednesday.
There are no recent comparisons for the 2015 and 2026 bonds.
Funding needs are higher this year because the government
must redeem more debt and take on debt-raising duties for its
regional governments, virtually frozen out of markets.
Spain aims to tap markets for around 10 billion euros a
month in medium- and long-term debt this year, though this could
become too expensive if yields return to last year's highs. That
might force the government to seek European aid.
"The large planned supply of bonds will pose a challenge for
the Treasury given that it seems unlikely that Spanish banks
will absorb the same net amount of government securities they
purchased in 2012," Mizuho bank said in a note.
"A continuation of the recent positive trend in the
peripheral bond markets and a growing involvement of
international investors are thus necessary if Spain is to avoid
an ESM-ECB support programme," it said, referring to the
European Stability Mechanism rescue fund.
Yields on the Spanish 10-year bond have eased back from
euro-era highs of over 7.6 percent last July to around 5.1
percent on Wednesday.
While the Treasury overshot bond issuance targets last year,
a shortfall in sales of shorter-term T-bills means Madrid has
not yet raised any of this year's borrowing needs.
So far Prime Minister Mariano Rajoy has been unwilling to
take the major political risk of making an aid request, but
while investors remain wary of possible ECB intervention, the
Treasury will make the most of relatively low rates.