Spain taps 3-year benchmark 4.00% July 2015 Bono and also off-the-run 3.25% Apr 2016 Bono & 4.40% Jan 2015 Obligacion issues Thursday for between E1.5bln-E2.5bln indicative size. The auction comes as Spanish yield spreads widened to fresh post ECB 3-year LTRO highs on ongoing Greek political jitters, speculation that Athens will have to exit the eurozone and concerns about the Spanish banking sector. In addition, with the ECB 3-year LTRO funds now looking exhausted, and risk of poor domestic demand given Ascension day. Whilst yields are expected to come in higher, the focus is on cover ratio and the price tails. The 4.00% 2015 Bono trades at 4.85% yield and was recently sold on May 3 for E978.9mln at avg yield 4.037%, tail 3.2bps and covered an impressive 2.88 times. The 4.40% 2015 Obligacion was last sold on Apr 4 for E1.127bln at avg yield 2.89%, cover 2.41 times. The 3.25% 2016 Bono issue was last sold on Mar 15 for E976mln at avg yield 3.374%, covered 4.13 times. Results are due around 0840GMT.
EasyForexNews Research Team