France, Spain Hold Bond Auction
France and Spain held debt auctions this morning and sold their desired level of bonds, though at a higher cost than expected. With growing global concerns over the recent rise of yields, Spain sold more bonds at a greater expense while Moody’s announced it will likely place France’s Aaa credit rating on review this year. These events will have a great effect on outstanding French and Spanish sovereign debt currently held by investors.
Nine of the top ten institutional investors in French sovereign debt are domiciled in France. Together they hold more than $84 billion in this paper that could lose its top credit rating. AXA Investment Managers of Paris owns the most with a $24 billion stake. AEGON is the lone investor outside of France among the top ten holders.
Santander Asset Management is the largest of three top investors in Spanish sovereign debt which are all Spain-based institutions. It owns $7.3 billion while Invercaixa Gestion holds $7 billion of the government paper. The former invests more than $400 million in French sovereigns while the latter holds just $145 million worth.
Of all institutional investments in French and Spanish sovereign debt, the countries with the most total ownership belong to those countries whose debt is in focus. French investors own more than two thirds of all French sovereign debt held by institutions.