Spain sells bonds--at least the market is still buying

06/18/2010 12:16 pm EST


Jim Jubak

Founder and Editor,

$4.3 billion down. Just $62 billion to go.

Yesterday, June 17, Spain sold $4.3 billion in bonds at auction at surprisingly low yields of 4.86% for the 10-year notes and 5.90% for the 30-year bond. Both rates were slightly below the yield on existing Spanish bonds in the secondary market.

Just so we don’t get too giddy the comparable yields on 10-year and 30-year U.S. Treasuries are 3.22% and 4.15%, respectively. Yield spreads for Spanish bonds over the yield of German bunds, the European bond benchmark, climbed to 2.25 percentage points. That’s a record spread since the launch of the euro in 1999.

Still it’s great news that Spain was able to raise money in the financial markets at all. That it came at such relatively reasonable rate is a big plus.

But this is really the beginning of Spain’s challenge and not the end.

The country has to sell about $62 billion in bonds in 2010.

The biggest hurdle is the refinancing of $20 billion in bonds by the end of July.

Related Articles on STOCKS

Keyword Image
Insider Eyes Kinder Morgan
15 hours ago

Insiders are starting to go radio silent in advance of the release of third-quarter operating result...

Keyword Image
What's Next for GE?
15 hours ago

Shares of industrial conglomerate General Electric (GE) jumped on the announcement that previous Cha...