Successful year for Treasure. With the last auction of the year, the public body has closed an exercise with 30% of the bills, short-term assets (from 3 to 18 months), in the hands of individuals. In total, retail investors, who have focused in recent months on the purchase of these assets that have rented above what the big banks offer for depositshave increased their holdings up to 21.3 billion euros at the close of last September 30. Is about an unprecedented high which, in turn, contrasts with the 2.4% they represented at the end of last year.
In the last tender of the year, three-month bills have increased their marginal interest up to 3,620%, the highest level in 12 years, with 398.89 million placed, compared to a demand of 1,643.98 million. The 9-month securities have lowered their yield to 3.510%, compared to 3.705% last month, with 1,343.1 million awarded out of a total demand of 3,273.9 million.
They have also had a lot of prominence non-resident investors, which have increased their holdings in State debt. both in absolute and relative terms, and stand at 40.7%.
2023 ends with the total net issuance of 65,000 million euros5,000 million less than initially planned. The gross issuance has been 252,000 million. The reduction in net financing is in line with the Government’s commitment to reduce the deficit and debt ratio with respect to gross domestic product (GDP), which, according to the latest estimates, will drop to 108.1% of GDP in 2023 and 106.3% in 2024.
Rise in interest rates
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The Treasury highlights the achievement of the objectives “in a context marked by the international uncertaintyhe increase in interest rates and the end of net purchases by the European Central Bank (ECB). Despite all this, there has been “a demand both in syndications and in ordinary auctions and a high participation of international investors.” And, to In turn, the risk premium “has remained at very contained levels.”
The public body highlights the “anticipation” work of recent years which, in its opinion, has allowed financing costs to be reduced despite the rise in interest rates. The total cost of debt stands at 2.09%, just 36 basis points higher than last year, compared to 450 basis points for interest rates. The average cost of debt issued this year was 3.4%. In turn, the average life of the debt, which is currently close to 8 years, “makes it possible to soften the effect of rising interest rates and reduce refinancing risks,” according to the Treasury.