© Reuters. The Treasury will issue 75 billion of net debt in 2022, in line with 2021
Madrid, Jan 10 (.) .- The Spanish Public Treasury has explained that it will carry out a net debt issue of 75,000 million euros in 2022, practically the same amount as last year, when it amounted to 75,138 million euros.
At a press conference, the Secretary General of the Treasury, Carlos Corps, detailed this Monday that the agency’s strategy, which will be marked by “prudence”, includes a gross issuance of 237,498 million, which represents a reduction of 10%, due to lower amortizations.
During the year, in which the Recovery Plan and the receipt of European funds Next (LON 🙂 Generation of the EU “will reach their cruising rhythm”, the execution of the program will be flexible to adapt to the evolution of needs in a context of “high uncertainty”, added Corps.
Also, in 2022, the Treasury will resort to syndicated issues and the green bond issued in 2021 will be reopened in order to reach a volume similar to that of the rest of the benchmarks on the agency’s curve in the coming years.
Compared to last year, the Treasury explained that finally, the net issuance amounted to 75,138 million, 25% less than the initial objective, and that it was fully covered through the issuance of medium and long-term instruments.
The gross issuance, meanwhile, amounted to 264,312 million. Of these, 169,886 million were obtained through medium and long-term instruments, and 94,426 million through the issuance of bills.
Regarding the issuance method, 82.9% of the gross financing was obtained through ordinary auctions, while the syndication procedure covered 12.8% of the financing program (33,872 million euros).
The remaining 4.3% (11,296 million) was obtained through loans from the SURE fund (European Temporary Support Instrument to Mitigate the Unemployment Risks in an Emergency) of the European Union.
The Treasury has also highlighted that during 2021, more than 60% of the debt issued was awarded at negative rates, which made it possible to reduce the average cost of outstanding State debt from 1.86% in 2020 to 1.64% , which is a record low.
Likewise, the average cost of the issues made by the Treasury in 2021 as a whole was negative for the first time in history, standing at -0.04%.
“These favorable financing conditions have led the State to disburse, in interest, 1,281 million euros less than in 2020”, highlighted the Treasury.
Regarding investors, the Treasury has highlighted that the weight of non-residents over total debt holdings has remained relatively stable at around 44%, although their participation in most of the syndications carried out in the year has been around 90% of the final allocation, exceeding it in some cases.
A trend that, as the Body has said, can “be expected to continue.”
The Bank of Spain’s debt holdings have continued to increase due to the Eurosystem’s purchase programs, a fact that has occurred at the expense of resident investors, whose weight barely represents 25%.
The Treasury has explained that these factors have contributed to the fact that the ratio has remained stable at around 60-70 basis points throughout the year.
Body, which has not wanted to estimate the evolution of ten-year debt profitability in the coming months, does expect that despite the progressive normalization of the ECB’s monetary policy, the risk premium will remain at current levels “smoothly”.
Finally, the Secretary General of the Treasury has advanced that the Government is already working on an addendum to the Recovery, Transformation and Resilience Plan that will incorporate the strategy for the loans of Next Generation funds, and that when the request is made it will be transferred to the financing strategy.
(Photo)