MADRID: Spain sold debt on Tuesday for the first time since S&P upgraded its credit rating on Oct. 2, raising a bigger-than-targeted 4.12 billion euros ($4.7 billion) and paying a record low cost of funding over six months.
The Treasury had said it aimed to sell between 3.5 billion and 4.5 billion euros of six- and 12-month bills.
It placed 1.3 billion euros of six-month paper at a marginal yield of -0.002 percent, down from 0.002 percent a month ago and only the second time the paper has been sold at a negative rate. Demand outstripped supply by 2.4 times compared to 6.5 times in September.
The yield on the 12-month bill also fell, to 0.018 percent, the second lowest on record, from 0.053 percent in September.
Explaining its decision to upgrade Spain's sovereign rating by one notch to BBB+, Standard & Poor's cited a strengthening economy, which it said would benefit public finances, and structural reforms including to the labour market.
Nearly one in four Spanish workers is unemployed even though the economy is growing after years in or near recession. Spaniards will vote in an election on Dec. 20, with the centre-right government expected to emphasise its economic successes as it seeks to win back voters after imposing big spending cuts.
The European Commission warned on Monday, however, that growth assumptions included in Spain's 2016 budget were too optimistic and that it risked overshooting its deficit targets.
Comments
Comments are closed for this article.