MADRID (AP) — Spain's first bond auction after its government unveiled a harsh austerity budget failed to raise the target amount Wednesday with borrowing costs on the country's long-term debt also showing a sharp increase.
In an auction of medium-term debt Wednesday Spain sold €2.6 billion ($3.5 billion) — short of its €2.5 billion_€3.5 billion target in the sale of notes maturing in 2015, 2016 and 2020.
The yield on benchmark Spanish 10-year bonds has been rising in recent weeks and stood at 5.53 percent in the secondary market shortly after Wednesday's sale, compared to 4.9 percent a month ago.
The average interest rate on the three-year notes was 2.89 percent, up from 2.44 percent in the last such auction on March 15. The bid to cover ratio was 2.4, half what it was in the last auction.
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