Spain had a successful bond auction, in which it raised 4.251 billion euros. The most notable part was the 10 year bond auction, which yielded a yield of only 5.29%.
With such low levels of the benchmark yields in the primary market, Spain will probably not be in a hurry to ask for aid, as the past shows. However, it could use the more favorable market conditions to get a more favorable bailout deal. Will Rajoy act?
This successful bond auction comes after Spain officially applied for a bank bailout: the ESM will transfer money to Spain’s banking authority FROB – around 40 billion euros. This money will add to Spain’s debt.
Spain raised 1.123 billion euros in 2022 bonds at a yield of 5.29%, compared with 5.458% last time. The cover was also better: 2.3 instead of 1.9.
The euro-zone’s fourth largest economy also raised 1.004 billion of 7 year (2019) bonds at a yield of 4.669% and a cover of 2.5 and 2.124 million in 3 year bonds (2015) with a yield of 3.39% and a cover of 2.
Market conditions do not match the sad state of the economy: around 25% unemployment, ongoing recession and internal tensions. After pro-independence parties won the elections in Catalonia, tensions are now high again as the central government wants to curb the usage of Catalan in public schools.
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