Spain urged to issue 50-year bond to help fill coffers

LAST UPDATED: 10 Aug, 2014 @ 11:20
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Spain urged to issue 50-year bond to help fill coffers

EXPERTS claim the time is right for Spain to issue a 50-year bond to bolster its economic recovery.

This would be its longest-term bond ever, as current bonds do not exceed 30 years.

Demand has soared over the past few years, as shown by the country’s 10-year bond launch in January, which pulled in a €40 billion subscription for a €10 billion supply.

If issued, it would be a private placement bond, meaning it would only be available to large firms such as banks and mutual funds.

Spain would not be the first EU country to launch the scheme, as France and Austria also both have 50-year bonds available, which have been well received.

This type of long-term investment may be exactly what Spain’s recovery needs, as immediate debts can be paid back.

Given high demand, low interest rates and large debt payments on the brink of the financial horizon, experts claim that now would be an opportune time for Spain to increase the average maturity of its debts.

“The time is right,” remarks David Schnautz, rates strategist at New York Commerzbank.

Spain’s finance ministry has yet to comment.

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  1. It would be as well to study Spanish finances through the ages, it is not a pretty picture. Remember that only one century after the massive looting of Gold and silver (silver was more highly prized than gold) from Central and South America, Spain went bankrupt 4 times – you could’nt make it up.

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