Spain sees cost of borrowing fall in auctions

AP News
Posted: Dec 13, 2012 6:18 AM

MADRID (AP) — Spain has seen the interest rate it has to pay to get investors to buy its benchmark bond fall in an auction that signals rising confidence in the government's management of its finances.

The Treasury sold €802 million ($1.05 billion) of its key 10-year bonds Thursday with the rate dropping to 4.2 percent from 4.47 percent in the last such auction Nov. 22.

It also sold €681 million in three-year bonds at a yield of 3.35 percent, down from 3.39 percent Dec. 5. In addition, it raised €540 million in bonds maturing in 2040 at a yield of 5.89 percent

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Demand was more than three times the amount offered overall.

Spain's borrowing costs have dropped from crippling highs earlier this year after the European Central Bank pledged to help troubled countries by buying up their short-term bonds if they apply for aid.