3/7-year Bonos and 30-year Obli

Spain will come to the market this morning to launch its new 7-year Bono and re-open the 3-year Bono and 30-year Obli. On offer will be E5.5-6.5bln.

• 0% May-24 Bono: The 3-year Bono was launched in January and reopened twice in February with E7.1bln of the issue outstanding ahead of today's auction. Demand has stayed consistent with bids of E4.78bln, E4.77bln and E5.21bln respectively leading to cover ratios of 1.85x, 2.09x and 2.56x. We expect another strong auction today.
• 0% Jan-28 Bono: Spain will launch its new 7-year Bono today, just under a year after the previous 7-year benchmark the 0.80% Jul-27 Obli was launched via syndication for E10bln. We expect strong demand at today's auction with at least E1.5bln of the issue sold, probably more. We note that the three auctions in the 7-year area so far in 2021 (two 0.80% Jul-27 Oblis and one 1.40% Jul-28 Obli) have all seen bids of just over E2.5bln but expect higher bids for the new issue today.
• 1.00% Oct-50 Obli: The benchmark 30-year Obli was launched in February 2020 via syndication for E5bln and has been reopened via auction five times since, most recently in January leaving E15.2bln of the bond outstanding. Demand for primary issuance of 30-year EGBs has remained generally strong, although we note yesterday's weak 30-year Bund auction. Given that Spain is also selling the low duration 3-year Bono and launching a 7-year Bono we expect that we are likely to see less of the 30-year sold at today's auction than the E1.92bln sold in January.