Naysayers. In the beginning of the year, they are out in full force. They are the people telling you...
Spain sells bonds--at least the market is still buying
06/18/2010 12:16 pm EST
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.
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