At the end of August, Santander announced that they would bid to buy back 16,5 billion euros of asset-backed bonds at a secondary market beating average of a bit over 80% of face value - this figure notwithstanding the usual media citing of the worst case, 61%, as the typical - and the uptake was dismal. Reuters reports that a mere 600 million were tendered. That's 3.6% and should give an indication of where institutional investors think the risks to the Spanish banking system lie.Similarly, the most recent Banco de España bulletin notes yesterday's auction of 1.55 billion two-years, yielding at the average bid 1.527% - 25 bps over the similar German bond in the secondary market, and 3.26 billion of five-years turning over 2.797% to their holders - 43 bps over the Deutsch version. Invertia tells us that the BE had originally intended to issue between 3.5 and 4.5 billion euros worth. The final tally was 4.811 billion for the two series.
Interesting to know, when they become available, will be the results of a three-year US dollar issue auctioned yesterday.
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