Spain sells 10-year bonds at lower rates

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Spain on Tuesday successfully sold government 10-year bonds to raise 6.0 billion euros (7.6 billion dollars) at a slightly lower interest rate than at a similar operation last month, a market source said.

The issue, which attracted bids worth 13 billion euros, carried an average yield of 4.83 percent, down from 4.864 percent at a previous auction on June 17.

Shortly after the operation Tuesday, the yield on existing Spanish 10-year bonds rose to 4.652 percent from 4.609 percent late Monday.

Moody's Investor Service last week warned Spain, struggling with a big public deficit and a fragile economy, that it was under review for a possible credit downgrade.

The agency said it could lower the country's AAA rating by one or two notches at the end of a three-month review, a move which would likely increase the rate of interest Spain would have to pay to attract new funds.

© 2010 AFP

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