Spain reaches 3-bn euro bond target
Spain succeeded in reaching its maximum 3.0-billion-euro target in a five-year bond sale on Thursday, although it paid sharply higher rates than in the last such auction in November.
However, the yield was lower than the market rate at Wednesday's close, and analysts said Spain appeared to have passed the latest test of its credit standing on the financial markets,
Spain is desperate to dispel fears of a debt emergency that would shake the foundations of the euro.
Spain, the fourth-biggest economy in the eurozone, equal in size to Ireland, Greece and Portugal combined, must show it can access market financing at affordable rates or re-ignite speculation it will need an international bailout.
On the eve of the Spanish issue, Portugal's government raised some hopes by raising 1.25 billion euros with strong interest and with rates that were high but below a psychological fear threshold of 7.0 percent.
The Spanish Treasury on Thursday sold 2.999 billion euros of five-year bonds, at the top of their hoped-for target range of 2.0-3.0 billion euros. Demand outstripped supply 2-to-1.
The average yield was 4.542 percent, up sharply from 3.576 percent in the last auction on 3.576 percent, but down from Wednesday's market rate of 4.767 percent.
The auction "went well" since Spain reached top of its sale target and the yield was lower than Wednesday's rate, UniCredit strategist Chiara Cremonesi told Dow Jones Newswires.
© 2011 AFP