Europe rushes to sell debt

FEBRUARY has been the busiest month for European sovereign debt issuance since March 2010, according to data from Thomson Reuters.

With only a few days in the year’s shortest month left to go, the data shows that sovereigns have been packing their debt sales into the first quarter, with $21.3bn (£13.1bn) issued so far and Germany planning a €7bn (£5.9bn) auction today.

January also saw a rush of issuances, with sovereigns placing £20.3bn versus nothing in December 2010.

Portugal was also due to hold an auction this week, but backed out after its last auction saw yields on five-year debt rise to a punitive 6.4 per cent – the highest since 1988 – and forced the European Central Bank to intervene to the tune of €711m.

Spain has held the biggest sale so far in 2011, having sold €6bn of 10-year notes in January at a 5.5 per cent yield, but that is due to be eclipsed by Berlin’s auction today.