Spain is taking advantage of robust investor demand by issuing new 12-year debt through a syndicate of banks, following a record-breaking Italian bond offering earlier this month, Bloomberg reports.
The inflation-linked offering is expected to raise as much as €4 billion ($4.5 billion), according to Commerzbank AG strategists.
Initial guidance suggests the bonds will price at around 25 basis points above comparable debt, according to a person familiar with the matter. While debt syndications typically carry a higher cost than auctions, they offer governments the advantage of raising substantial sums quickly and expanding their investor base.
The bookrunners for the deal are Citigroup Inc., Credit Agricole SA, Goldman Sachs Group Inc., Morgan Stanley, Banco Santander SA, and Societe Generale SA.
The move comes amidst a backdrop of strong demand for European sovereign debt. Italy recently saw record-breaking demand for its new bonds, indicating investor confidence in the region’s economic recovery. Spain’s decision to tap the market through a syndication suggests they are similarly confident in their ability to attract capital at favorable rates.
