Spain and Italy's borrowing costs fall
13 Jan 2012
2012 kicked off well for Spain and Italy as bond auctions held this week saw strong demand for its bonds with borrowing costs falling for both countries.
Spain borrowed €10 billion ($12.8 billion), double its original Spanish Treasury's target range of €4 billion to €5 billion - paying an average interest rate below 4 per cent.
Spanish interest rates for the three, four and five-year bonds were about one percentage point below its previous auction and the bids exceeded supply 1.7 times
Spain sold €3.21 billion of 4.25 per cent bonds maturing in October 2016 at an average yield of 3.91 per cent, down from 4.85 per cent in a previous auction.
Marketwatch quoted Nicholas Spiro, managing director of Spiro Sovereign Strategy, a London-based advisory firm, ''It's always good to get off to a good start in the New Year and this is the latest in a string of solid Spanish auctions. Yields are down sharply and demand was robust.''
Italy raised €12billion in its auction with interest rate on its 12-month bonds falling to 2.735 per cent from 5.952 per cent at the last similar auction in December.
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