MADRID: Spain's Treasury said on Friday it has replaced a planned new 3-year bond issue due Dec. 1 with three off-the-run bonds maturing in 2015, 2016, and 2017.
The announcement came after short-term debt yields in Italy already struggling with higher borrowing costs than Spain - surged to levels regarded as unsustainable for public finances at a tender.
"It seems a sensible thing to do as there is a lot of pressure on the front-end right now," said Peter Chatwell, strategist at Credit Agricole.
"Also, Italy will sell a new three-year issue too so it will make it easier for the market to absorb by issuing at different maturities."
Spain has been under intense market pressure amid concerns euro zone leaders are not moving fast enough to resolve the debt crisis and yields on a new 10-year bond last week came close to the 7 percent level widely considered as unaffordable.
The bond maturing April 30, 2015 has a coupon of 3.0 percent, the bond maturing Jan. 31, 2016 a 3.15 percent coupon and the bond maturing Jan. 31, 2017 has a 3.8 percent coupon.
The Treasury is due to announce target ammounts for the auctions on Monday around 1300 GMT.
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