The treasury

The Treasury is the issuer of Government Debt securities, and accordingly it is responsible for:

  • 1. Drawing up the auctions calendars
  • 2. Calling each auction, and setting the annual coupon of bonds
  • 3. Resolving auctions, determining the volume and the yield of the securities to be issued

 Its function in the debt market is essentially to cover the central government borrowing requirement at the lowest possible cost, while maintaining risk within acceptable bounds.

 Its main objectives are:
1. To achieve stable financing flows. Requiring:

  •  The establishment of a regular, well-publicised issues schedule, with announcement of placement targets
  •   Control of refinancing risk by increasing medium- and long-term issues
  •  Transparency of information, assured by the drawing-up of issue schedules and notification of the financing strategies
  •   Smoothing out the maturities profile of the yield curve through bond exchange programmes and buy-back policies

2. To reduce the cost of finance. It is accordingly empowered to manage debt issuance by means of:

  •  Yield-curve management
  •  Buy-back policies
  •  Interest rate swaps

3. To ensure an adequate degree of market liquidity.

  •  By increasing the amount of issues to over 10 billion euro
  •  By exchanging illiquid issues in order to streamline debt references

4. To offer investors an attractive financial instrument.

 By tailoring the assets issued to investor demand (strips, 30-year Obligaciones, credit lines mobilisable via Letras del Tesoro, etc.)