Business World

Friday 23 March 2018

Signs of recovery as Spain sells two-thirds of bond target

Luis de Guindos, Spain's finance minister
Luis de Guindos, Spain's finance minister

SPAIN has already issued 63.2pc of the government bonds it had targeted for 2013 after a debt sale yesterday, and is now open to other forms of funding.

It has sold €85.3bn of medium and long-term debt and €59.9bn short-term bills this year, with its maximum target around €230bn. It is also due to hold an auction of three-year, five-year and 10-year bonds tomorrow.

Economy Minister Luis de Guindos (pictured) said yesterday that he expected a good result from the sale. He also said the euro region's fourth-largest economy was beginning to recover.

The Treasury in Madrid said it would consider diversifying its funding methods with instruments such as longer-dated bonds, inflation-linked bonds or dollar bonds if positive sentiment continued. Spain sold a 15-year bond through banks last week, its longest-dated security since 2011.

The yield on Spain's benchmark 10-year bond has fallen about 300 basis points since ECB President Mario Draghi pledged to support the euro in July 2012 – very positive for a country that many still referred to as a "basketcase" less than a year ago.

Still, the European Commission forecasts the Spain's debt will rise to 97pc of its economic output next year.

Irish Independent

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