The Spanish Treasury continues to find open hands for its paper after topping its maximum target of 4.5bn euros in Thursday's auction.

The Spanish Treasury issued three series of bonds for €4.505bn on falling yields although demand was not quite as strong as in the previous auction.

- 2015-year bonds: €2.409bn at a yield of 2.7% compared to 3.3% in previous auction; the bid-to-cover ratio fell to 2.02 from 4.81.

- 2018-year bonds: €1.584bn at a yield of 3.8% (vs. 4.0%); the bid-to-cover ratio fell to 2.3 from 2.6.

- 2041-yearr bonds: €512m at a yield of 5.7% (vs. 6.0%); the bid-to-cover ratio was 2.0, same as before.

Analysts at Bankinter said that the Spanish Treasury is on a solid pace, having placed €11.3bn of debt in the first two auctions of the year, 5% of the gross total expected for 2013. "We can see that the country is recovering credibility," they say.

In late 2012, many analysts had been expecting Spain to request a bailout in the first quarter of 2013. That idea has slowly disappearred but is not ruled out.

European equities continued to register slight gains following the bond auction with the Spanish risk premium falling 3% to 351.80 basis points.

MG

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