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Spain successfully issues treasury bonds


11:07, December 02, 2011

MADRID, Dec. 1 (Xinhua) -- The Spanish Treasury on Thursday successfully auctioned 3.75 billion euros (5.06 billion U.S. dollars) in bonds in the midst of the eurozone debt crisis.

The bonds, with a lifetime of three, four and five years, have an interest rate of 5.2 percent for the three- and four-year bonds and 5.5 percent for the five-year bonds.

Although the rates are around 0.7 percent higher than those in the last bond auction, Thursday's release can be considered a success given that analysts had thought Spain would have to pay rates of over 6 percent and the demand for the bonds was twice of the actual offer.

The success of the bond issuance brought further good news for Spain with its risk premium dropping to 379 points, considerably lower than the 499 points briefly reached on Nov. 17, just a few days before the general election.

Two weeks ago, the Treasury saw a 10-year bond issuance with interest rates of up to 7 percent, a level many considered unsustainable.

The pressure on the Spanish debt has been eased by several factors, such as the approval of the latest rescue package for Greece, the eurozone's efforts to ramp up the European Financial Stability Facility (EFSF), and the increased interest rates for the German 10-year debt.

There will be another three bond auctions in Spain before the end of the year. The 12- and 18-month bonds will be issued on Dec. 13, while more of the country's debt will be floated on Dec. 15 and 20.


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