Spain will tap the market.....>

SPAIN AUCTION PREVIEW: Spain will tap the market today for E3.5-4.5bln. On offer

are the 0.25% Jul-24 Bono, the 1.45% Apr-29 Obli and the 1.85% Jul-35 Obli.

- BACKGROUND: The 0.25% Jul-24 Bono was last sold on May 9 with E1.02bln sold at

an average yield of 0.09% and bid-to-cover ratio of 2.91x. The 1.45% Apr-29 Obli

was also re-opened in May with E1.78bln sold at an average yield of 0.94% and

bid-to-cover ratio of 1.4x. The 1.85% Jul-35 Obli was last tapped on April 11

with E1.25bln sold at an average yield of 1.64% and bid-to-cover of 1.32x.    

- RV/HISTORY: Spanish yields have compressed sharply since the beginning of the

year and have taken another leg lower in May. The curve has similarly flattened

with the 2s10s falling to 119.9bp from 171.5bp at the beginning of the year,

while spreads over bunds have also narrowed with the 10-year spread now at 95bp

from a high of 128bp in January. Relative to the comparable EUR swap, the 0.25%

Jul-24 Bono trades 7.3bp outside, the 1.45% Apr-29 Obli trades 45.3bp outside

and the 1.85% Jul-35 Obli 98.5bp outside.

- TIMING: Results are due shortly after the auction closes at 0945BST.