UPDATE: Spain Sets 2020 Bond Guidance At Swaps + 2.00 Area

6th Jul 2010 10:42

(Adds background, comment) By Art Patnaude Of DOW JONES NEWSWIRES LONDON (Dow Jones)--The Kingdom of Spain has set price guidance on its 10-year, fixed rate, euro-denominated benchmark bond, around 200 basis points over midswaps, a bank running the sale said Tuesday. While concerns over European economies have continued to pressure markets, worries specific to Spain's ability to fund itself have eased after it successfully sold EUR3.5 billion of five-year bonds at an auction Thursday, the maximum it had planned to sell. "Our baseline expectation is that (the deal) will go relatively smoothly despite the recent concern about getting peripheral auctions into the market," said analysts at ING N.V. in a note to investors. The spread between Spanish 10-year government bonds and the benchmark German bund is slightly tighter Tuesday, at 207.6 basis points from 212 basis points late Monday. Moody's Investors Service Inc. rates Spain Aaa, the last of the three major ratings agencies to have kept its triple-A status, but said last week it is reviewing the country for a downgrade by one, or at most two, notches. Standard and Poor's Corp has Spain rated AA, while Fitch Ratings Inc. lowered its rating to AA+ in May. Barclays PLC, Deutsche Bank AG, Banco Bilbao Vizcaya Argentaria SA, Banco Santander SA, Credit Agricole SA, and Caja de Madrid are joint lead-managers on the deal. -By Art Patnaude, Dow Jones Newswires; +44 (0) 207 842 9259; [email protected] (Mark Brown contributed to this report) (END) Dow Jones Newswires July 06, 2010 05:42 ET (09:42 GMT)