30/05/2012 00:00
TW
0

Madrid.—The news was confirmed yesterday by Javier Maycas, the Bank of Spain's MonetaryPolicy Director on the publication of the Annual National Debt Report for 2011 .

Total borrowing fell by 17 percent to level out at 53'603 million euros, compared to 64'812 million euros in 2010, Maycas said. The drop in borrowing was largely thanks to public Treasury accounting adjustments, he added. Maycas claimed that the issue of government bonds and securities had been the preferred method of raising funds to the tune of 24'262 million and 28'490 million euros respectively.

Treasury bills were issued only to the value of 850 million euros last year which Maycas said means that the calculated average period of repayment is around six and a half years.

He said that for minor financing programmes, Treasury activity on the primary markets last year had seen a reduction in investment of 4% which rose to 199'724 million euros in 2011, compared to 208'624 million the previous year.

Amortisations, Maycas said were also slightly higher than in 2010.
The average cost of borrowing last year rose by 130 base points largely due to the European sovereign debt crisis, climbing from 2.54 to 3.85 points.
In 2010, the cost rose by just 37 base points.
According to the Annual National Debt Report, the most significant variation in the use of bonds and securities was the increase of 22'800 million euros in the credit system, excluding the Bank of Spain.

Non-resident foreign investors increased their tenure to the tune of some 2'000 million euros as a result of the increase in issuance of government bonds. The Report showed that these non-resident foreigners continue to be the most important investors, accounting for 48.8% of the debt cover total, although their participation in the Spanish economy declined by 4.6% last year. Maycas said that institutional investors (investment funds, pensions, insurance companies, etc.) are the second most significant investors accounting for 18.3% of government financing or 16'600 million euros.

Opposition leader Alfredo Perez Rubalcaba has said he will assist Spain's Partido Popular Prime Minister Mariano Rajoy find a solution to the debt crisis.