Spain pays higher rates to borrow for 10-15 years

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Spain sold 10 and 15-year debt bonds worth 2.621 billion euros ($3.74 billion) on Thursday, but the interest rate it had to offer rose slightly amid tension over the eurozone debt crisis.

The Spanish treasury had to offer a rate or yield of 5.896 percent to borrow money for 10 years from a rate of 5.395 percent when it made the last such issue on June 16. It had to offer 6.191 percent to borrow for 15 years from 6.027 percent on May 19.

Existing Spanish bonds have fallen sharply recently, pushing up the yield on these bonds to levels generally considered to be unsustainable in the long-term, a signal that Spain is being sucked into the eurozone debt crisis.

The 10-year issue raised 1.807 billion euros, and the 15-year issue 814.3 million euros.

Demand was strong, exceeding 5.1 billion euros, enabling the treasury to achieve its target of raising 1.75-2.75 billion euros.

Economy Minister Elena Salgado said recently that despite tension on the debt market, Spain encountered no problems in placing its debt each time it made an issue.

© 2011 AFP

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