MADRID: Spain said Wednesday the launch of its first 50-year bond in two years drew strong investor demand, as it became the latest eurozone country to jump on the long-bond bandwagon.
The Spanish Public Treasury sold 3.0 billion euros ($3.4 billion) of the bond maturing in 2066 via a syndication which drew orders worth 10.4 billion euros, the economy ministry said in a statement.
"The high demand allowed the Treasury to assign the emission to very high quality investors, that is to say, of a very diverse typology both by the type of investor as well as by geographic areas," the statement said.
Companies and governments are increasingly borrowing at longer maturities in Europe as the European Central Bank's stimulus measures have pushed down bond yields and lowered borrowing costs, forcing investors to seek longe-dated debt to generate returns.
France and Belgium both issued 50-year bonds last month, while Ireland and Belgium went even further, issuing 100-year bonds.
The 50-year bond Spain issued on Wednesday had a yield of 3.49 percent, down from the yield of 4.02 percent when it issued 50-year government bonds for the first time in September 2014, suggesting investors are more concerned of the firsts of holding Spanish debt.
Last year the Spanish economy, the eurozone's fourth largest, expanded by 3.2 percent -- one of the fastest growing rates in Europe but the government predicts it will post a budget deficit this year that exceeds the limit of 3.0 percent of economic output set by Brussels for the ninth year in a row.
The country has been without an acting government since an inconclusive December 20 general election.
Last week King Felipe VI dissolved parliament and called a repeat election on June 26 after talks between parties failed to produce a coalition government.
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