The Spanish Treasury has raised 4.938bn euros with the issuance of 12- and 18-month bills although it had initially set out a maximum target of 4.5bn euros.

The Treasury issued:

- 12-month bills for €4.225bn at a yield of 2.85% (average 2.797%) versus the prior 2.823%. The bid-to-cover ratio was 2.1.

- 18-month bills for €713m at a yield of 3.077% (average 3.035%) versus the prior 3.022%. Demand was solid with a bid-to-cover ratio of 5.72.

Many analysts see this debt auction as a head start for the Treasury's 2013 financing plan considering that Spain already filled its funding needs for 2012.

"Spain is done for the year, so the auction [...] could be regarded as prefunding for 2013, although we expect to see an upward revision to the deficit for 2012," said Danske Bank's chief analysts Jens Peter Sorensen and Thomas Thogersen Gronkjaer last week.

Nonetheless, Spanish 10-year yields on the secondary market remain close to the psychological 6% 'danger zone' which many analysts believe should prompt Spain to request international aid.

MG

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