Spain sells $3.3 billion in auction
MADRID - The Associated PressSpain managed to beat its targets for an auction of medium-term debt, but at sharply higher interest rates, in its first bond sale since its credit rating was downgraded over fears that it may seek a bailout.
The Treasury sold 2.52 billion euros ($3.3 billion) in 3- and 5-year bonds yesterday. It had set a target range of 1.5 billion euros to 2.5 billion euros.
The Treasury sold 978 million euros in three year bonds at an average interest rate of 4 percent, up from 3.5 percent at the last such auction on April 19.
It also sold 1.54 billion euros in two categories of 5-year bonds. The yields were 4.75 percent and 4.96 percent, up from 4.3 percent on April 4.
In the secondary market, the yield on Spanish 10-year bonds stood at 5.82 percent, virtually unchanged from a day earlier’s close.
The auctions came ahead of the monthly ECB meeting, which took place this time in Barcelona. As expected, the ECB kept its benchmark interest rate at the record low of 1 percent.
Spain, in recession, and with a 24.4 percent jobless rate and banking sector heavily exposed to an imploded real estate market, is the focus of the latest bailout fears hounding the eurozone.
Late last week, S&P downgraded the country’s credit rating by two notches from A to BBB+, citing a worsening budget deficit, worries over the banking system, and poor economic prospects.