Spain has been reported to sell seven billion Euros of a new benchmark 10-year bond through banks. For the first time in three years, the nation auctioned 12-month bills at a yield of less than one percent.
A person, with knowledge of the deal, said that the 10-year sale attracted bids that exceeded 21 billion Euros and the bonds were sold to fetch 4.452%. The person asked not to reveal his name as they are not authorized to speak about it.
Spain issued seven billion Euros of securities maturing in January 2023 at a yield of about 5.4% in a similar sale on Jan 22.
It appears that Spain's top banker has received a pension jackpot. Alfredo Saenz, former chief executive of Banco Santander has retired and has received the biggest pay cheque for his pension.
It is the first time that a bank has disclosed its pension provision in this manner. It is speculated that it would be the same for some of his top colleagues.
Bankia, Spanish lender, has witnessed pathetic 2012, as it saw record losses. But it seems that things have been improving as the lender has announced a return to profit.
The bank has informed that they have been able to make profits worth 74m euros in the first quarter of 2013. They opted for bailout, which helped it to get rid of loans.
Jose Sevilla, Bankia's director general, was of the view that the bank will be making a comeback this year. Without a doubt they have to take a number of steps so that they do not witness such problem again.
Recession has pushed Italy and Spain to take financial aid of the European Central Bank. However, the European Central Bank has asked them to place austerity plans before getting the bailout. At present, Italy and Spain are seeking financial aid of the European Central Bank.
Italy Prime Minister Mario Monti has been pressuring Spain Prime Minister Mariano Rajoy for accepting the pre-emptive bailout. However, Rajoy has not accepted the advice. If the suggestion of Monti would have been accepted, then Italy might have got the bailout easily.
As said by EU Commissioner Olli Rehn on Monday, the amount of 40 billion euros ($51 billion) in European aid that Spain has decided to use for its banks that are not doing well, will start flowing from November onwards. Also, this money will not set any kind of action towards the structural deficit of the country.
With the deepening of euro zone's sovereign debt crisis, Spain has been working quite hard to embrace down its borrowing costs. In addition, it has also committed to the European Union in regard of bringing its deficit down to 6.3% of gross domestic product this year.
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