AP News

Demand strong in key Spanish bond auction

MADRID (AP) — Spain has raised €4.8 billion ($6.2 billion) in a debt auction that saw strong demand and a drop in the benchmark interest rate — a sign of increased investor confidence.

The Treasury sold €859 million in benchmark 10-year bonds Thursday at an average rate of 5.67 percent, down from 6.65 percent in the last such auction Aug. 2. Demand was 2.8 times the amount offered.

The Treasury sold €3.94 billion in three-year bonds at a rate of 3.84 percent, up from 3.6 percent.

The total sold was €300 million more than planned.

Spain's borrowing costs have fallen from unsustainable highs since the European Central Bank in August unveiled plans to buy the bonds of financially weakened countries. Madrid has said it may apply for aid if the terms are reasonable.

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