Spain sees good demand, higher rate in bond sale

[January 13, 2011]  MADRID (AP) -- Spain has easily raised euro3 billion ($3.9 billion) in a debt auction that was a key test of investor confidence, the day after a successful bond sale in Portugal eased market pressures somewhat.

Demand was strong, with bids worth 2.1 times the amount on offer. However, the average yield on the 5-year bonds on Thursday was up by nearly a percentage point, to 4.54 percent compared to 3.58 at the last such auction on Nov. 4.

Spain had hoped to raise between euro2 billion and euro3 billion in the auction.

It came a day after Portugal, which many fear might be the next in line to need a bailout after Greece and Ireland, saw good demand for its debt sale.

[Associated Press]

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