Yields on 3- and 9-month bills fall in an auction in which demand doubles supply.

The state treasury awarded this Tuesday 2,050.6 million eurosin the middle range of the planned target, in the auction of three- and nine-month bills, and did so at rates slightly lower than the rates in the previous auction for this type of paper, according to data from the Bank of Spain. .

This auction comes at a time when individual investors continue to show strong interest in buying debt, primarily in the short term given its yield.

In fact, the combined claim of both recommendations more than doubled the amount that was ultimately awarded, with requests totaling €5,460.3 million.

In particular, at the auction on Tuesday, The Treasury raised €490.6 million in three-month bills.compared to more than four times the demand (€2,030.9 million), resulting in marginal profitability 3.632% compared to 3.653% previously.

At the auction nine months of writingan agency dependent on the Ministry of Economy allocated 1.560 million euros, while investor requests amounted to 3.420 million, at a marginal interest rate of 3.519%, which is slightly lower than the previous 3.578%..

In the latest issue of this type, the Treasury issued 1.991 million higher-rate bonds for nine months and lower rates for three months.

Tuesday’s auction comes after the European Central Bank’s (ECB) recent decision to keep interest rates unchanged, so that the base rate for its refinancing operations will remain at 4.50%, while the deposit rate will remain at 4% and the on loans at 4.75%.

Following today’s release, the Treasury will return to markets next Thursday and place between €5.5 billion and €6.5 billion in an auction that will close issues for April.

Specific, plans to auction three-year government bonds with a coupon of 2.50%; 10-year government bonds with a coupon of 3.25%; Government bonds with a remaining maturity of 6 years and 3 months with a coupon of 1.95% and Government bonds with a remaining maturity of 42 years and 3 months with a coupon of 3.45%.

The previous yield of these links was 2.899%. for 3-year government bonds; for 10-year government bonds – 3.196%; at a rate of 2.697% for government bonds with a remaining maturity of 6 years and 3 months and at a rate of 3.652% for government bonds with a remaining maturity of 42 years and 3 months.

TREASURY FINANCING PROGRAM FOR 2024

Generally, The Treasury’s 2024 funding strategy projects new funding requirements of around 55,000. million this year, which is 10 billion less than in 2023.

In turn, the expected gross issuance will be 257.572 million euros, 2% higher than in 2023, due to increased depreciation, and the bulk will be covered by the issuance of medium- and long-term instruments in order to maintain the average life of the public debt portfolio.

As part of the Ministry of Finance’s strategy for 2024, it is planned to again resort to syndication to issue individual government bonds.

Other goals for 2024 will support diversification of the investor base and commit to issuing green bonds as a building block of the financing programme, thereby strengthening the market for sustainable finance.