The Treasury will return to the debt markets on Tuesday and hold a bill auction, with interest rising

The issue will be held after the ECB kept rates at 4.

The Treasury will return to the debt markets on Tuesday and hold a bill auction, with interest rising

The issue will be held after the ECB kept rates at 4.5% for the fourth consecutive meeting


The Spanish Public Treasury will return to the debt markets this coming Tuesday and will hold an auction of three- and nine-month bills, at a time when the remuneration offered to investors for this reference rate has once again been raised.

It will be the first auction held after the latest decision of the Governing Council of the European Central Bank (ECB), in which it was decided to maintain interest rates, so that the reference rate for its refinancing operations will remain at 4 .50%, while the deposit rate will remain at 4% and the lending facility rate at 4.75%.

In the last issue of three- and nine-month bills, the Treasury placed 2,036 million euros, and did so by raising the marginal profitability offered to investors by both references.

Specifically, the interest rate was raised from 3.538% to 3.740% on three-month bills, reaching its highest level since November 2011. For its part, on nine-month bills the profitability was raised from 3.492% to 3.504%. .

In the first auction of the month, held on March 5, the Treasury also raised the marginal profitability offered by the bills, in this case for six and twelve months.

The improvement in the interests offered, in line with the increases in interest rates by the European Central Bank (ECB) last year, has maintained the markets' investor appetite for Spanish securities.

Thus, individual investors are showing great interest in purchasing debt, mainly in the short term, given its high profitability, which has grown since the beginning of 2022, especially in the case of shorter-term bills, although it has already stabilized.

According to the latest data published by the Bank of Spain and collected by Europa Press, the high profitability of short-term securities has had a very considerable effect on the distribution of Treasury bill holdings, where households and non-financial institutions For the first time in 2023, they have become the largest holders of this type of debt.

As an example, the participation of households in the purchase of bills has gone from 1,826 million euros at the end of 2022 to 24,428 million in December 2023. Thus, they have significantly increased their participation in the last year, going from a share of 2 .4% in December 2022 to more than 34% in 2023.

The Treasury has already issued 40,846 million euros in just over a month of the year, 23.6% of its medium and long-term financing program for 2024. The average life of the State debt in circulation reaches 8 years and the average cost of the portfolio is 2.1%.

Overall, the Treasury's 2024 financing strategy foresees new financing needs of around 55 billion for this year, which represents a reduction of 10 billion compared to 2023.

For its part, the expected gross issuance will amount to 257,572 million euros, 2% higher than in 2023 due to the increase in amortizations, and the bulk will be covered by the issuance of medium and long-term instruments with the aim of maintaining the average life of the public debt portfolio.

Within the Treasury's strategy for 2024, it is planned to once again resort to syndications for the issuance of certain references of State Obligations.

Other objectives for 2024 will be to maintain the diversification of the investor base and commit to the issuance of green bonds as a structural element of the financing program, thus strengthening the sustainable finance market.