Spain taps E3.0-E4.0bln of....>

SPAIN AUCTION PREVIEW: Spain taps E3.0-E4.0bln of SPGB 0.45% Oct-22, SPGB 1.45%

Oct-27 and SPGB 4.7% Jul-41 alongside E0.25-0.75bln of the SPGBei 0.3% Nov-21. 

- BACKGROUND: On the political front the Catalan tensions appear to be abating

with the Bund-Bonos spread tightening considerably over the past month, yet the

Catalan election is on 21 Dec. There are no coupon or redemption payments to

help.

- RV/HISTORY: Peter Chatwell and Antoine Bouvet at Mizuho write "We find that

10Y is a better sector to invest than shorter maturities as it has more

potential to tighten to core and as it is a good way to limit nominal exposure

to Spain ahead of the Catalonia referendum. We do find bonds surrounding Oct27

are more attractive in micro-RV however, notably 2028 and 2029 issues". Oct-22

was last sold a month ago at 0.36% yield and 2.3x cover, the Oct-27 was sold at

the same time with a 1.5x cover and 1.54% yield and the Jul-41 was sold in

August at 1.47x cover and 2.545% yield. the Linker on sale has not been issued

recently.

- RESULTS: Auction bidding closes at 0930GMT with results around 0940GMT