Despite the uncertainty surrounding the fate of the bailout for Cyprus and concern over possible contagion effects, Spain managed to place more sovereign debt than expected and at a lower cost this morning.

The Spanish Treasury managed to sell €4.51bn in three separate debt auctions, more than the €3-€4bn targeted.

Specifically, Spain placed €1.1bn in 2015 bonds with the bid-to-cover ratio rising to 4.0 from 3.7 the previous time around, while the average yield dropped to 2.275% from 2.540% previously.

It also placed €1bn in 2018 bonds, with demand settling at 3.6 times the amount on offer, compared to the prior print of 2.3, while financing costs fell to 3.557% from the previous 3.572%.

Some pressure was seen in the placement of the longer-term 10-year Spanish Treasury bonds as the bid-cover on the €2.3bn sold dropped to 1.9 from 2.3. However, the yield did move down to 4.898%, from the previous 4.917%.

JM

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