Spain sells $5.34 billion of short-term debt at an affordable cost, demand solid too

MADRID – Spain has managed to raise €4 billion ($5.34 billion) at an affordable cost in another sign that investors are more confident about the government’s handling of its finances.

The Treasury says Tuesday it sold €3.1 billion in new nine-month bills Tuesday at a yield of 1.14 per cent.

It also sold €886 million in three-month bills at an average rate of 0.42 per cent, compared with 0.44 per cent in the last such auction Jan. 22.

Spain’s borrowing costs have fallen in recent months as fears the country might need a bailout have receded.

Demand was five times the amount offered for the three-month bills and 2.3 times for the new bills.

The country is in the throes of its second recession in three years with unemployment at 26 per cent.