Spanish Treasury adds to its piggy bank for next year

The Spanish Treasury on Thursday continued to take advantage of relatively favorable market conditions to bring forward coverage of its funding needs for next year.

The debt-management arm of the Economy Ministry sold 3.880 billion euros in bonds of different maturities, when it had been looking to issue a maximum of 3.5 billion. Yields offered also continued to fall.

The Treasury has already covered its needs for this year and is getting a head start for next year when it needs to raise over 200 billion euros to meet debt maturities and cover the deficit for next year, which the government is hoping to trim to 4.5 percent of GDP from 6.3 percent. It had a cushion of 29.319 billion euros as of the end of October and since then has issued a net 8.153 billion in new debt.

The government of Prime Minister Mariano Rajoy has taken advantage of the easing of market conditions to put off a decision on whether to seek a bailout from the European Stability Mechanism.

The Treasury sold 1.712 billion euros in bonds maturing in October 2015 at an average yield of 3.617, down from 3.660 percent at a tender at the start of this month. The bid-to-cover ratio was 2.1 times. It issued a further 645 million euros in benchmark five-year bonds, with bids exceeding the amount issued by 2.6 times. The average yield fell to 4.477 percent from 4.766 percent.

In the last leg of the auction, it sold 1.523 billion euros in bonds maturing in April 2021 at an average yield of 5.517 percent, down from 5.545 percent at the previous tender. The bid-to-cover ratio was 1.8 times.