Spain pays record low yields on three- and five-year bonds

The Spanish Treasury on Thursday sold 5.59 billion euros, 90 million more than targeted, in three- and five-year government bonds at record low yields as bids almost doubled the amount sold.

The debt-management arm of the Economy Ministry issued 2.304 billion euros in three-year paper at a cut-off rate of 1.587 percent, down from 1.620 percent at an auction held on January 16. Thursday’s rate was the lowest yield paid for paper of this maturity since the euro was introduced in 1999. It sold a further 3.285 billion euros in five-year bonds at a marginal rate of 2.282 percent, which was also a euro-era record low.

The Treasury has issued a total of 27.686 billion euros in medium- and long-term debt since the start of the year, about a fifth of what has been programmed for the full year.

Thursday’s auction was held ahead of the European Central Bank’s monthly monetary policy committee meeting, which opted, as expected, to leave the ECB’s key intervention rate at an historic low of 0.25 percent. Euro-zone inflation hit a record low of 0.7 percent, compared with the ECB’s medium-term target of below but close to 2 percent.