MADRID: Spain raised 4.3 billion euros ($5.5 billion) of medium and long-term bonds Thursday, more than it had targeted, at lower interest rates, despite market concerns over the financial crisis in Cyprus and the political stalemate in Italy.
The Treasury had expected to raise 3.0-4.0 billion euros via the bond auctions, and demand outstripped supply by over two to one.
The Treasury sold 589.9 million euros of five-year bonds at an average yield of 3.598 percent, down from 4.193 percent at the last similar auction held on March 15, 2012, the Bank of Spain said in a statement.
It sold 660.5 million euros in eight-year bonds at an average yield of 4.477 percent, down from 5.517 percent from the last similar auction held on November 22.
The Treasury also raised 3.06 billion euros in three-year bonds at an average yield of 3.019 percent.
This auction was not comparable to previous sales of three-year-bonds since it had a fixed coupon of 3.3 percent instead of a coupon of 3.75 percent in the previous operations.
The risk premium or spread -- the extra rate demanded by investors in Spanish 10-year bonds over the rate offered by equivalent German bonds -- stood at 354 basis points shortly after the bond auction, down from 363 basis points when markets opened on Thursday.
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