Spain picks up another 3.88bn euros in long-term debt

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LONDON (ShareCast) - The Spanish Treasury on Thursday again tapped the sovereign debt market for more than it has targeted.

This time around, it has issued long-term bonds for €3.88bn compared to the €2.5-3.5bn expected.

Yields dipped on the three bond issuances while demand remained solid. The outcome of the auction was as follows:

2015-yr bonds: sold €1.712bn for a yield of 3.61% vs. 3.66% in prior auction; bid-to-cover ratio of 2.1 vs. 2.8.

2017-yr bonds: sold €644m for a yield of 4.477% vs. 4.76%, bid-to-cover ratio of 2.6 vs. 2.5.

2021-yr bonds: sold €1.523bn for a yield of 5.15% vs. 5.54%, bid-to-cover ratio of 1.8 vs. 2.2.

On Tuesday, the Spanish Treasury issued 12- and 18-month bills for nearly €5bn. The yields ticked slightly higher on that occasion.

"Spain issues a small amount. The longer bonds look like they've been opened due to specific dealer demand, the shorter one will be supported because it falls into the OMT (CDNX: OMT.V - news) window," Rabobank rate strategist Lyn Graham-Taylor said ahead of the auction.

Spain had already covered its funding needs for 2012. The remaining auctions this year can help give a head start on 2013 or cover potential shortfalls in the 2012 budget deficit target. There are two more bond auctions scheduled this year.

MG