Investor appetite for Spanish bonds continues to rise, as seen by the success of the Spanish Treasury's latest issue. The Treasury placed €40 billion of bonds yielding 5.15% p.a., of which 65% were bought by foreign investors.

BBVA, alongside five other institutions, underwrote the syndicated bond issue, Spain's fifth sovereign issue this year. The bonds mature in 2044, making this the longest issue by the Kingdom of Spain since September 2009.

The bonds were sold at 250 basis points over the average benchmark swap curve rate -5bp above the expected initial pricing- enabling the Treasury to take advantage of the market's warm reception. Orders for €10 billion were made in the first hour, before rising to €10.6 billion when the window closed an hour and a half later. 

The strong take-up showed the interest among foreign investors from a host of different countries. In all, foreign investors bought up 65% of the bonds, broken down as follows: UK 28%, US 10%, euro area 16%, Scandinavia 8%  and Switzerland 2 %.

By investor type, the largest buyers were insurance companies and mutual funds (32%) and fund managers (30%), followed by banks (23%), hedge funds (9%) and central banks (4%).