Spain holds debt at its highest price since 2014 after losing support from the European Central Bank

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It already has to pay an interest of 2.5% for a ten-year bond, when it was closer to 0% last year.

Government chairman Pedro S.
The President of the Government, Pedro Sánchez, and the First Vice President, Nadia Calvio, in the Senate this Tuesdayfernando alvaradoEFE

Spain already holds debt at the highest price since 2014 after losing support from the European Central Bank (ECB). The Treasury is forced to pay 2.5% interest on the ten-year bond, the benchmark in the markets, when it was close to 0% last year with full support from the ECB. The escalation takes place before the imminent announcement of the presiding body Christine Lagarde That it abandons the euro countries’ special public debt purchase program launched in the pandemic to focus on rate hikes to fight inflation. An increase in profits has been noted by investors in syndicated bonds issued by the Treasury on Tuesday.

The sources of the Ministry of Economy who direct Nadia Calvio They assure that 8,000 million euros has been issued in new 10-year syndicated bonds with high demand of close to $40,000 million. The increase in profitability keeps investors’ appetites up, but drives up the cost of debt. The risk premium with respect to German bonds has been above 110 basis points for weeks, almost double what it was a year ago.

The Treasury is accelerating its issues if costs become even more expensive by July, when the first ECB rate hike is scheduled. For this purpose, the ministry’s agency has ordered six banks to hold this new syndicated issue of 10 years. Specifically, the Treasury has mandated BBVA, Barclays, Credit Agricole, Deutsche Bank, JP Morgan and Morgan Stanley to hold this new 10-year syndicated state bond.

opposition leader, Alberto Nez FeijoThe increase in the cost of debt in its first control session before the President of the government echoed this Tuesday, Pedro SanchezHowever he has pointed out that “the risk premium is already at $250” when he wanted to state that the bond should already offer a return of 2.5%.

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