Spain Prepares a Sale of New 10-Year Bonds

Updated on
  • Syndicated deal via banks could come as early as Tuesday
  • Spanish bonds rallied on credit rating improvement by Fitch

Spain’s Treasury is preparing to sell new 10-year bonds this week in a syndicated deal as soon as Tuesday that may raise approximately 9 billion euros ($11 billion), two people familiar with the matter said.

The Madrid-based institution may carry out the sale via banks, according to the people, who asked not to be named because the deal hasn’t been finalized. A spokesman for the Spanish Treasury said it doesn’t comment on issuance plans. The Treasury has sold a new 10-year bond via banks every year since at least 2014.

Spanish notes have rallied this month, with the benchmark 10-year yield having declined 15 basis points to 1.42 percent. The extra yield that investors demand to hold the nation’s debt over comparable German bunds has shrunk 30 basis points in January to 84 basis points as Fitch Ratings upgraded the sovereign rating by one notch to A minus, citing a buoyant economic recovery.

Spain is rated BBB+ at S&P Global Ratings with a positive outlook, and is rated Baa2 at Moody’s Investors Service. While S&P is due to review its rating in March, Moody’s will give an update in April.

The new bonds will mature in April 2028, according to a third person, who isn’t authorized to speak publicly. The banks hired are Barclays Plc., Banco Bilbao Vizcaya Argentaria SA, Citigroup Inc., HSBC Holdings Plc., NatWest Markets Plc. and Banco Santander SA, the person said.

— With assistance by Hannah Benjamin

(Adds banks in the deal in the fifth paragraph.)
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