Contenido

Spanish Debt

 

•   
• Non EURO Debt
• Letras del Tesoro (Treasury Bills)
• Bonos y Obligaciones del Estado
  (Government Bonds)

 

•  Since the beginning of the 1980s, the Kingdom of Spain has taken an active part in international capital markets, which has allowed it to diversify its financing sources and risk distribution. As a consequence of the foregoing, the Treasury is considered a sovereign issuer of great prestige and solvency, and this fact is recognised by the main international credit rating agencies.
•  At present, foreign currency-denominated financing plays a complementary role to euro-denominating financing, in addition to the possible obtaining of cost savings. One of its primordial objectives, in addition to the potential obtaining of cost savings through arbitration-based transactions, is to diversify the international investor base in bonds issued by the Kingdom of Spain. The percentage of the Treasury debt in foreign currency with respect to total debt in circulation is around 1.5%.
•  In addition, there is a stock of debt in euro banknotes and coins originally issued in foreign currency which, following the introduction of phase three of the European Economic and Monetary Union, was converted into national currency-denominated debt. Initially, these were Eurobonds in German Marks and French Franks, issued in accordance with the habitual procedures of the Euromarket. Their value has fallen as the outstanding transactions have been amortised in such a manner that today, only one issue is in circulation which was originally in French Franks and is scheduled to be amortised in April 2012.
•  The composition by currencies of the Treasury’s foreign currency-denominated debt (before swaps) shows a predominance of bonds in Dollars, followed at a considerable distance by Yens and Pounds Sterling. By instruments, the segment comprised of negotiable instruments is of notable importance: Eurobonds and Mid-Term Notes, with loan participation being zero at the present time. The foreign currency exposure of the debt portfolio is negligible, since all these issues are covered by swaps which means there is no exchange rate risk.