Tuesday, June 19, 2012

BBC News - Spanish borrowing costs jump at debt auction


Spanish borrowing costs on 12 and 18-month bonds jumped to 5.1% at its first debt auction since securing a 100bn-euro ($126bn; £81bn) bank bailout.
Spanish Prime Minister Mariano RajoyPrime minister Mariano Rajoy has called for G20 leaders' help to cut Spain's record borrowing costs
Madrid raised the intended 3.04bn euros but the interest rate payable rose from 3% at a similar debt sale on 14 May.
Independent auditors will also delay giving details of Spanish bank debts while they gather more information.
The total bank debt figure will determine the size of bailout needed and is due to be published this week.
On 9 June, the eurozone agreed to provide up to 100bn euros in emergency loans to help bolster under-capitalised Spanish banks, which were hit hard by the collapse of the country's property market.
The eurozone's fourth-biggest economy is struggling to finance its debt on commercial bond markets.
On Monday, the interest rate, or yield, on benchmark 10-year bonds traded on the secondary market hit a record high of 7.1%. Rates higher than 7% are widely seen as unsustainable.
Greece, Portugal and Ireland all had to seek international aid to pay their loans when their bond yields hit similar levels

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