Spain saw modest demand for a new five-year bond issued today, reflecting some unease over holding Spanish debt due to concerns over euro zone peripheral countries' finances as they struggle to cut their deficits.
The Treasury sold €3.4 billion of the issue, just below the middle of its target range of €3 billion to €4 billion, attracting €5.4 billion in bids.
Analysts said the auction was only reasonably successful, highlighted by a bid-to-cover ratio of 1.6 times, unchanged from the previous five-year auction in early September but down from July's by 1.7 times.
Spain has consistently been able to place its debt this year despite market tensions surrounding the weaker euro zone economies.
The average yield on the bond was 3.576 per cent, up from the last auction of five-year debt on September 2nd, when yields fell sharply to 2.964 per cent.
Spain's financing costs remained high today as seen in the 185 basis point spread of its key 10-year bond yield over benchmark German bunds.
Still, that was some way down on the 200 basis point spread seen in September and less than half the spreads of Portuguese and Irish debt, which hit a lifetime high of 529 basis points against the German Bund earlier today.
Reuters