Spain and France plan to raise as much as €13.5 billion in debt, as Prime Minister Mariano Rajoy's struggles to meet deficit targets and the French presidential elections drive up yields.
Spain is issuing as much as €2.5 billion in two- and 10-year bonds, while France has set a maximum target of €11 billion for securities including 2017 notes and 2018 inflation-linked debt.
Scrutiny of both countries is increasing amid the fading effect of the ECB's longer-term refinancing operation, which injected about €1 trillion of liquidity into the region’s financial system. The yield on Spain’s benchmark 10-year bond has jumped about 1 percentage point since the beginning of March to above 6 per cent, while the yield on the equivalent French security has gained about 10 basis points with Socialist François Hollande leading in election polls.
“It’s a difficult time for both countries to sell bonds”, said Marc Chandler, head of global currency strategy at Brown Brothers Harriman & Co. “The first quarter was really about the absorption of the LTROs. The second quarter is going to be more about politics.”
Full article
© Bloomberg
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article