MADRID: Spain raised 2.494 billion euros ($3.173 billion) in a sale of three- and four-year bonds Thursday that saw Madrid pay higher rates, a sign of mounting concern over its debt position.
The treasury paid interest rates of between 4.375 and 5.106 percent, up sharply from the last comparable operations when it paid interest rates of between 2.89 and 4.037 percent, the Bank of Spain said in a statement.
Demand was at the upper end of expectations by the treasury, which had anticipated sales of between 1.5 billion to 2.5 billion euros.
Uncertainties over Greece have caused Spain's borrowing costs to rise as investors pour their money into safe-haven German bonds while fleeing eurozone nations seen most at risk.
"The risk premium has gone up a lot, and that means it is very difficult to get financing and it is very difficult to do so at a reasonable price," Prime Minister Mariano Rajoy told reporters in parliament on Wednesday.
Alarm spread across the eurozone after Greece called a new election for June because its politicians had failed to form a government, notably because of division over the terms of their international bailout.
Investors are worried not only over Spain's public deficit but also a recession, sky high unemployment and a banking sector exposed to potentially huge problems with its property-related assets.
The Spanish government auctioned 372 million euros of three-year bonds in one round at an average yield of 4.375 percent, compared with 2.89 percent at a sale on April 4.
It also sold 1.024 billion euros in a separate three-year auction at a yield of 4.876 percent, compared with 4.037 percent on May 3.
Finally, the government sold 1.098 billion euros in four-year bonds at an average yield of 5.106 percent, up from 3.374 percent at the last comparable auction on March 15.
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