Spain to press on with debt auctions

Source: Financial Times

Spain’s Treasury on Monday vowed to continue as normal with sovereign bond auctions, arguing that the eurozone’s weekend agreement on a €100bn bailout for Spanish banks would underpin the country’s debt market.

Market analysts have expressed doubts as to whether the deal to recapitalise banks with a loan injection via Spain’s state Fund for Orderly Bank Restructuring will provide lasting benefits. On Monday morning Spanish bonds rallied, but the euphoria quickly faded.

In research notes on Monday, most analysts said Spain would still find it difficult to finance itself at reasonable rates of interest. A particular concern for potential private bond investors is that any loans made by the European Stability Mechanism due to come into force next month would have seniority over other lending.

The Spanish Treasury, however, issued a statement that it would “continue with the implementation of its financing programme, following its regular auction calendar”.

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