September 4, 2018 / 10:30 AM / 2 months ago

Catalan bond yields fall on reports Spanish PM to offer autonomy vote

LONDON, Sept 4 (Reuters) - Catalonian bond yields fell across the curve on Tuesday after reports that Spanish Prime Minister Pedro Sanchez has proposed a referendum on greater autonomy for Catalonia, though he was said to have ruled out an independence vote for the wealthy region.

Sanchez said on Monday that there should be a new grand accord agreed between the Spanish and Catalan authorities to give more power to the region, the Financial Times reported him as saying to Spain's Cadena SER radio. <on.ft.com/2oDU96b >

Catalan’s regional bonds maturing in February 2020 , the largest bond the region has outstanding, hit an all-time low yield of 1.058 percent on Tuesday.

It fell as much as 76 basis points from Monday’s close.

Analysts say that Catalonia’s bond market is illiquid and therefore highly volatile, particularly at the shorter end of the curve.

Still, other Catalonian bond yields were also lower on the day. A May 2030 bond yield, for example, was down 4 bps at 3.94 percent. (Reporting by Abhinav Ramnarayan; Editing by Dhara Ranasinghe)

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