The latest three-year Treasury bond auction, held on October 1, closed with a marginal rate of 3.439%. The minimum investment is 1,000 euros and can be purchased directly from the Bank of Spain with very low fees.
With inflation in Spain nearing 5%, savers are seeking alternatives to curb the loss of purchasing power. One such option is the purchase of three-year Spanish government bonds, which in the auction on October 1 reached a marginal interest rate of 3.439%, as reported by estrategiasdeinversion.com. The minimum investment is 1,000 euros, the price of one bond.
This yield surpasses that of banking products such as current accounts or deposits, and also that of money market funds, which have accumulated a gain of 1.25% in the first nine months of the year. The saver can sell the bonds at any time to obtain liquidity, although they assume a potential risk of additional gain or loss depending on how rates evolve. Those who hold the bond until maturity will secure that 3.439%.
In the secondary market, the yield on three-year bonds currently stands at 3.409%. Entering this market to buy or sell incurs higher costs due to the involvement of an intermediary.
Spanish debt can be purchased directly from the Bank of Spain, either in person or online. To operate online, it is necessary to have a digital certificate, electronic ID, or Cl@ve. The investor must open a direct account exclusively for the buying and selling of bonds and for receiving coupons. The transfer fee is 0.15% of the transferred amount, with a minimum of 0.90 euros and a maximum of 200 euros.
The next auction of bonds and obligations is scheduled for October 15. Those interested in participating must start the procedures several days in advance.
Outside of Spain, other European Treasuries offer higher yields. Three-year bonds from Belgium hover around 3.5%, those from Greece exceed that level, those from Italy are quoted at 3.80%, and those from France reach 4.03%.
The French case is the most striking due to its high public deficit, which is difficult to correct given the political situation in the country, which would require a consensus to cut spending. Eiko Sievert, executive director of Sovereign & Public Sector at Scope Ratings, points out that the average maturity of French debt is 8.5 years, which delays the impact of rising financing costs on public accounts.
“However, its sustainability continues to deteriorate, so a significant and sustained fiscal adjustment over several years will be necessary,” Sievert indicates.
The Scope Ratings expert adds that the yield on ten-year French government bonds rose to 4.8% in September, compared to 4.14% for Spanish bonds, and from around 3.6% in January. The spread between French and German ten-year debt has widened to nearly 120 basis points, its highest level since June 2012.
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