Similar to what José Ortega y Gasset proclaimed about himself, the Public Treasury is itself and its circumstances. Because without this how can we fathom yesterday?s issuance of 10 and 15-year bonds.
These circumstances come from sovereign debt crises in Europe´s peripheral countries and credit tensions resulting from lack of confidence in those countries (Spain is one of them). And the circumstances have boosted Spanish 10-year bonds to their highest rate since 1997. Those were pre-euro times.
Only in this environment could the Treasury get a good rating. It had to pay the highest rate of interest in 14 years, the price of the issuance was more expensive than the one in June and demand wavered. But all that said, the result was positive.
This outcome was supported by one main reason: the Treasury put out the debt at an interest rate inferior to the rate currently imposed by secondary markets, platforms in which shares are listed and sold after being issued.
While the yields on 10-year bonds opened at 5.98% yesterday (by the afternoon they had dropped to 5.72%), the Treasury raised them to average rates of 5.89% and at the margin at 5.92%. The same thing happened with 15-year debt. In the markets they were around 6.25% and the Treasury issued it at an average of 6.19% and 6.21 at the margin.
