| CATEGORY: INTERNATIONAL ECONOMIC |
Tue 24 Jul 2012
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LONDON (SHARECAST) - Spain managed to meet its target in the today’s debt sale, but at the same time paid the highest financing costs since the introduction of the euro, in 1999.
The Spanish Treasury raised €3.05bn in funding with the sale of 3 and 6 month T-bills in comparison with the €3bn target yet borrowing costs rose on both issues. The average yield on the 3 month rose to 2.434%, from the prior 2.362% while the 6 month jumped to 3.691% from the 3.237% seen in the previous auction.
At these elevated prices, the bid-to-cover ratio came in strong at 2.94 and 3.02, respectively.
Spain has been plagued with high funding costs as worries over its deficit flourish. Recently, the Eurozone stepped in to a provide a €100bn bailout to the country’s financial sector at the same time the euro area’s fourth largest economy battles to reel in public spending in its autonomous regions as they face about €15bn in redemptions in the second half of this year. Just last Friday, Valencia became the first state to admit that it would need to request financial assistance from the central government.
MG
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