Spanish Sovereign

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Tuesday, March 23. The source for secondary trading levels is ICE Data Services.

Greece and the Flemish Community are preparing to sell syndicated bonds at the long end of the euro curve following a strong reception for France with the sale of its second green OAT on Tuesday.

Agence France Trésor (AFT), the French sovereign debt office, mandated banks on Monday to lead the sale of the sovereign’s second green OAT, returning to the market for the first time since its debut in 2017.

Pablo de Ramón-Laca is director general of the treasury and financial policy at Spain's Ministry of Economic Affairs and Digital Transformation. That places him in charge of the world's ninth largest sovereign debt stock, according to S&P data, for a country pummelled by the Covid-19 pandemic. Spain has the second highest number of cases in the EU and the seventh highest in the world. But even that is not the full story of the pandemic's impact.

Spain’s new 50 year euro benchmark, which was priced last week, has performed well in the secondary market with the spread narrowing by 3bp, according to levels provided by ICE Data Services.

Rating: Baa1/A/A-

Unlike its last syndication in January, when Spain lost over €75bn of orders after an aggressive move in pricing, the sovereign took a more cautious approach on its return to the public market this week to print its biggest ever 50 year bond.

After taking an aggressive approach for its last syndication in January which resulted in a shocking loss of over €75bn of orders, Spain returned to a more moderate and conventional pricing process as it came to the market for a new 50 year bond on Tuesday.

Spain will lead the public sector borrowers' charge into the primary bond market this week with its second ever 50 year benchmark syndicated deal ahead of the Chinese New Year holiday.

Few deals have ever had €75bn of orders. Spain managed to lose that much, but still have €55bn remaining in the book. This is the world the ECB’s purchase programmes have built.

Rating: Baa1/A/A-

A book of more than €55bn for a €10bn bond priced with a new issue premium of 1bp would be a gratifying outcome for any sovereign issuer. But Wednesday's syndication for Spain instead attracted robust criticism over price moves during bookbuilding which derailed what was on course to be the biggest order book in bond market history.