ECB bond purchases soar

SPAIN scrapped a long-term debt auction yesterday in favor of a bond sale via banks as highly indebted Eurozone states took advantage of more benign market conditions to lock in lower-cost borrowing.

Belgium also said it would seek to issue a new bond, most likely for 10 years, through a syndicate of banks. Portugal has said it plans to place a syndicated bond this quarter.

Spain sold €6bn (£5bn) of 10-year syndicated bonds at a spread of 225 basis points over mid-swaps, or 256.4 points over the German 10-yr bund.

The news came as figures showed that market intervention by the ?European Central Bank (ECB) jumped last week, as the bank’s purchases soared to €2.3bn, its highest weekly total since mid December.

The figures, released yesterday, confirm that the ECB, lead by its president Jean-Claude Trichet, has intervened heavily to prop up demand at Eurozone debt auctions. In the two weeks preceeding last, it bought €113m and €164m. The total value of bonds bought by the ECB now stands at €76.5bn.