Spain pays higher rates in 4.49 bln euro bond sale

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Spain paid sharply higher borrowing rates to sell 4.49 billion euros ($6.2 billion) in bonds on Thursday in the midst of market turmoil over a feared Greek default.

The Treasury auction, held as a eurozone rescue plan for Greece was thrown into uncertainty, raised 2.928 billion euros in five-year bonds and another 1.562 billion euros in bonds expiring January 2014.

The sale raked in a combined total 4.49 billion euros, meeting the Treasury's target of 3.5-4.5 billion euros but only at higher rates, a Bank of Spain report showed.

Even at the high yields, interest was only moderate with demand exceeding available supply by a little more than 60 percent.

Spain's Treasury paid out a yield of 4.848 percent on the five-year bonds, up significantly from the 4.489 percent it paid at a previous comparable auction in September.

It paid 4.270 percent for the bonds expiring January 31, 2014, which were off the run, meaning they have been succeeded by a new issue and are therefore harder to trade.

© 2011 AFP

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