Rates ease in Spain’s last 2012 debt sale

Spain’s short-term borrowing rates eased on Tuesday in a sale of short-term sovereign bills, its last such financing operation in 2012, the central bank said.

In a sale of three- and six-month bills it borrowed slightly more than the target range of 2.5 to 3.5 billion euros, reflecting an easing of investor concern over Spain’s financial stability.

The rate of return demanded by investors who bought the three-month bills fell to 1.195 percent on Tuesday from 1.254 percent in the last comparable sale on November 27.

On the six-month bills, the rate fell to 1.609 percent from 1.669 percent, the bank said in a statement.

Spain had already met its 2012 fund-raising target from sales of medium- and long-term bonds to finance state activities and had embarked early on its 2013 programme.

This has given the right-leaning government a breathing space as it ponders whether to seek a sovereign bailout for the debt-ridden, recession-struck economy.

Prime Minister Mariano Rajoy’s government has resisted seeking a sovereign rescue from the eurozone’s bailout fund, which could unlock bond-buying support from the European Central Bank to curb its financing costs.

EU leaders last week thrashed out a deal to create a eurozone bank supervisor, a key step towards allowing eurozone rescue funds to intervene directly in the region’s stricken banks.

Spain secured funding of up to 100 billion euros ($130 billion) from its eurozone partners in June to help rescue its banks, brought to their knees by a mountain of bad debt built up in a property bubble which burst in 2008.

Separate figures from the central bank on Tuesday showed that the ratio of bad loans on Spanish banks’ books hit a fresh record in October at 189.6 billion euros, or 11.23 percent.