Demand from investors was high today at Spanish government debt auctions, although Spain paid a much higher price than at previous sales.
Today’s auction was the first since ratings agency Standard & Poor downgraded the country’s credit rating by two notches last week.
The sale was seen as a test of investor confidence in a country struggling to get a hold of spiralling public debt and unemployment.
A spokesperson from the economy ministry said the demand for the three- and five-year Spanish bonds signified an increase in confidence in the country’s economy.
“The demand has been evenly shared on the three bonds sold, which shows investors are still interested in the Spanish debt, especially in the longer maturities,” they said.
The Treasury issued 2.5 billion euros after it reached half of the gross amount targeted for the year within the first four months.
Today Spain sold 979 million euros of a bond maturing in 2015 with an average yield of 4.037 percent and a bid-to-cover ratio of 2.9, compared to a ratio of 2.4 at another recent auction.
It also sold 764 million euros of a bond maturing in 2017 with an average yield of 4.752 percent.