The Public Treasury has placed 5,062 million euros on Tuesday in a short-term debt auction, and has done so by remunerating investors with higher interest for six-month letters, according to data published by the Bank of Spain.
At a time when private investors are showing great interest in buying this type of debt given its high profitability, which has been growing since the beginning of 2022, the demand in this auction has exceeded 10,190 million euros, more than double the amount finally awarded.
Specifically, the body under the Ministry of Economic Affairs and Digital Transformation has placed 1,062.76 million euros in six-month bills, compared to a demand of 2,327.09 million, and the
marginal interest rate has been placed at 2.693 %,
above the 2.599% of the previous auction in January and reaching its highest level since July 2012.
In 12-month bills, the Treasury has placed 4,000 million, below the 7,863.7 million requested by investors,
with a marginal return of 2.839%
, below the previous 2.998%.
It should be remembered that as of this same Tuesday it will be necessary to request an appointment for the Direct Accounts service of the Bank of Spain, after the long queues observed these days at the headquarters of the organization for the purchase of State bills given their high profitability.
The purchase of debt can also be carried out through the Treasury website in the 'securities purchase and sale service' option, as well as in financial institutions (banks or savings banks) and in securities companies and agencies.
The objective is to reinforce customer service channels, both on the web and by telephone, given the exponential increase in demand from retail investors to acquire public debt that has occurred in recent weeks.
This increase in demand is slowing down the purchase service through the Treasury website and occasional interruptions, due to the need to maintain the level of security of operations and the correct transmission of data to the Bank of Spain, especially before this exponential increase in demand, in such a way as to ensure the protection of the retail investor.
The Treasury has returned to the markets today after placing 6,499.35 million euros in the first auction in February, remunerating investors in the four references issued at the highest rates.
In fact, profitability managed to exceed 3.5% in 20-year State bonds.
All this in a context marked by the successive rises in interest rates by both the Fed and the European Central Bank.
In fact, the last decision adopted by the Governing Council of the European Central Bank (ECB) was to raise interest rates by 50 basis points, so that the interest rate for its refinancing operations will stand at 3%, while that the deposit rate will reach 2.50% and the loan facility rate will reach 3.25%.
"The change in tone in the ECB's monetary policy has meant a substantial change for fixed-income assets," said the general director of the Treasury and Financial Policy,
Álvaro López Barceló,
in an interview on
And in this scenario, López Barceló has explained that Treasury securities offer a combination of "security, profitability and liquidity" that make them very attractive.
Especially for retail investors looking for short terms.
"So far in 2023, purchases through the Treasury website from retailers have increased by more than 1,100 million euros," says López Barceló.
triple all acquisitions in 2022.
Even so, he considers that it is still early to know its degree of incidence on the Spanish public debt.
The latest data released by the Bank of Spain dates from November 2022 when only 0.2% of Spanish public debt was in the hands of private retailers.
According to Álvaro López Barceló, this percentage will increase in the coming months, but, at the moment, the majority holding of Treasury securities is held by international investors, with 40% of the total.
According to the 2023 General State Budget (PGE), gross issuance by the Public Treasury this year will be 256,930 million euros, which represents an increase of 8.2% compared to the estimate for 2022, due to the rise in the interest rates.
For its part, the net indebtedness of the Public Treasury in 2023 will remain at 70,000 million.
Breaking down by type of instrument, the Treasury Bills are expected to provide net negative financing of 5,000 million, so the State bonds and obligations, together with the rest of the debts in euros and foreign currency, will contribute the remaining 75,000 million.
According to the criteria of The Trust Project