Spain pays lower rates in five-year bond issue
Spain raised 3.6 billion euros ($5.2 billion) in a bond auction on Thursday at lower rates, on a market that has relaxed because of European Central Bank intervention.
The bonds were sold at a rate of 4.489 percent, down from 4.871 percent at the last similar auction on July 7 when markets were wracked by fears that Italy and Spain were being dragged into the same eurozone debt spiral that has hit Greece, Ireland and Portugal.
Demand was strong, exceeding 6.3 billion euros, which allowed the treasury to meet its goal of selling between 3.0 and 4.0 billion euros in bonds, the Bank of Spain said in a statement.
The sale showed that massive intervention by the European Central Bank on Italian and Spanish bond markets which began this month has eased investor concerns.
The spread or difference in the rate of return on Spanish 10-year government bonds and the benchmark German bond, the strongest in the eurozone, has dropped significantly, after soaring above 400 basis points in early August.
It stood at 291.3 basis points on Thursday.
The Spanish treasury announced at the beginning of last month when markets were highly volatile that it cancelled a bond auction scheduled for August 18.
© 2011 AFP