Rates rise for Spain bonds amid Greek tensions

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Spain's government had to pay out higher rates Thursday to auction off nearly four billion euros ($5.8 billion) of bonds amid deep concerns in the European debt markets over Greece.

Demand was strong for the Spanish government bonds as investors applied for a total of 10.3 billion euros of debt, but the government had to offer higher returns.

Debt markets appeared nervous after Moody's Investors Service sharply downgraded Greece's debt and warned that the odds of a Greek debt-default were 50-50.

The Treasury sold a total of 3.953 billion euros in three and four-year government bonds.

It sold 2.753 billion euros three-year bonds with an average annual return, or yield, of 4.037 percent, up from 3.568 percent at the last comparable auction on April 7.

The Treasury also sold 1.2 billion euros in four-year bonds at an average yield of 4.230 percent, up sharply from 2.964 percent at the last comparable auction on September 2, 2010.

© 2011 AFP

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