Spain sells debt at negative rates but with the highest rates in two years

Madrid, May 10 (.).- The Public Treasury of Spain has placed this Tuesday 1,875.6 million euros in short-term bills at a negative interest rate, but higher than those of the last auctions of this denomination and the most high since the start of the pandemic.

According to data from the Bank of Spain, the State has sold 1,470 million in nine-month letters with a marginal interest of -0.081%, much higher than that of the auction last April (-0.385%).

In three-month bills, it has awarded 405.6 million at 0.478%, a rate also above the 0.652% of the last bid.

In both cases, these are the most expensive placements for the Public Treasury since the beginning of the pandemic, when interest rates in the secondary market rose a lot due to uncertainty and the greater indebtedness that governments had to face.

In April 2020, nine-month notes were even sold at a positive interest rate, 0.039%, something that had not happened since September 2015.

The higher cost of financing that the Treasury currently has to assume also responds to the rise in the yield of sovereign debt in the secondary market due to the tightening of monetary policy by the US Federal Reserve (Fed) and other central banks.

The rise in interest on bonds has sharpened after the half-point rate hike agreed by the Fed last week, which has led the ten-year Spanish doubt to exceed 0.2% in the secondary market, a a level not reached since July 2015.

Investor demand remains high and today’s auction exceeded 5.4 billion euros, almost triple the amount awarded.

The Treasury had set itself the goal of awarding between 1,500 and 2,500 million.