The Treasury will hold its last auction of September next week, marked by the ECB’s rate cut

September 15 () –

The Spanish Treasury will close the September auctions with an issue of government bonds that will be marked by the latest decision of the Governing Council of the European Central Bank (ECB) to lower interest rates by 25 basis points, so that the deposit rate is set at 3.50%.

Monetary policy decisions affect Treasury auctions, which in recent months have seen the remuneration offered to investors rise, in line with the rise in interest rates. This has led to increased interest in the purchase of debt, especially in the case of the acquisition of Treasury bills by households.

However, in line with the cut in interest rates, the Treasury has now been reducing the remuneration offered to investors in recent auctions.

On Thursday, September 19, the agency dependent on the Ministry of Economy will auction Government Bonds with a remaining life of 4 years and one month and a coupon of 5.15%; Government Bonds at 7 years, with a coupon of 3.10% and Government Bonds at 20 years, with a coupon of 3.45%.

The reference marginal interest rates for this auction are 3.197% for Government Bonds with a remaining life of 4 years and one month; 3.420% for Government Bonds with a 7-year maturity; and 3.652% for Government Bonds with a 20-year maturity.

TREASURY FINANCING PROGRAM FOR 2024

Overall, the Treasury’s 2024 financing strategy foresees new financing needs of around €55 billion for this year, which represents a reduction of €10 billion compared to 2023.

The expected gross issuance will amount to 257,572 million euros, 2% higher than in 2023 due to the increase in amortizations, and the bulk will be covered by the issuance of medium- and long-term instruments with the aim of maintaining the average life of the public debt portfolio.

As part of the Treasury’s strategy for 2024, it is planned to resort again to syndications for the issuance of certain references of State bonds.

Another objective for 2024 will be to maintain the diversification of the investor base and to focus on the issuance of green bonds as a structural element of the financing programme, thereby strengthening the sustainable finance market.