Catalan Government bonds massively bought on first day

Barcelona (ACN).- After 2 weeks of controversy, bonds of the Catalan Government’s debt have been put on the market today. The bonds can be purchased by regular citizens through banks and savings banks. The bonds are of 1,000 euros at a 4.75% 1-year interest rate. The quantity on the market is 1,890 million euros, which can be increased to 2,500 if decided. On the first day, about 1,000 million euros have already been purchased, confirming the high acceptance of this financial product among the Catalan citizens. The financial entities selling them, a total of 23, are happy with customer responses and insist that they do not see this initiative as a competition. If the selling pace continues, the 1,890 million euros in bonds will be sold out by Monday or Tuesday of next week. The Catalan Government will decide if it will increase the sum to 2,500 million in total, which is likely considering the high acceptance of the product and the difficulties of obtaining credit in international financial markets.

23 financial institutions are commercialising the Catalan Government’s treasury bonds. The banks and savings banks that are selling the bonds say that the first day went “very well”. They stated that if the selling pace continues, the bonds would be sold out by next week, much before the last purchase date on the 19^th of November,. In fact, financial sources affirm that the expectations have been reached, as a large number of citizens went to their banks to ask for information on the bonds in the last few days.

The bond emission is for a global quantity of 1,890 million euros, which could be increased up to a global of 2,500 million. Citizens can buy a minimum of 1 bond at 1,000 euros and a maximum of 2,000 bonds, which are worth 2 million euros. They will cash the investment in 1 year’s time, on the 21^st of November 2011, getting back their money plus an interest rate of 4.75%. However, some financial entities are charging commissions for the service. Therefore, depending on the bank that customers buy the bonds, the yield of the operation could be lower.

The opposition criticised the emission at first. Then, it focused its critiques on the conditions, saying that a 4.75% interest rate is too high and jeopardises the Government’s 2011 budget. The Catalan Government’s members were underlining the past days that this kind of operation is normal and that the interest is effectively high, but also in financial markets.