Spain Said to Seek Investor Interest in New 30-Year Bond

  • Yield premium to Italian counterpart reaches two-year high
  • Treasury declines to comment on speculation of debt offer

Spain has sounded out banks for the sale of a new 30-year government bond within weeks, according to two market participants who are familiar with the Spanish Treasury’s planning.

The exact timing is uncertain, they said, as the current 30-year security has tumbled in the past month, and fell on Thursday. That drove up its yield to the highest level in two years compared with its Italian counterpart of a similar maturity.

Selling a new long-term security, typically syndicated through banks, would keep the Treasury ahead of its financing schedule for 2015, when it plans to issue a net 51 billion euros ($57 billion) of debt this year. An official with the Treasury in Madrid declined to comment.

A late September-early October deal would come only weeks after Spain sold 878 million euros of the current 30-year bond, and within days of the Sept. 27 elections in Catalonia, the region that includes Barcelona. The Catalan independence movement from Spain is central to the election campaigning, and analysts have said the outcome may affect the sovereign’s debt prices.

Spain’s 30-year yield has jumped to 27 basis points, or 0.27 percentage point, over that of a similar-maturity Italian bond. That compares with an average eight basis points less than Italy in the year through June. Barclays Plc forecast Spain would try to sell 4 billion euros of a new 20-year or 30-year Spanish bond on Sept. 15, in a note last week to clients.

The current Spanish 30-year bond yield climbed three basis points, or 0.03 percentage point, to 3.24 percent as of 4:39 p.m. in London. The 5.15 percent security due in October 2044 dropped 0.6, or 6 euros per 1,000-euro face amount, to 135.77.

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