Interest rates drop as Spain raises $6.5 billion in latest successful debt auction

MADRID – Spain has sold €5 billion ($6.5 billion) worth of bonds at a lower cost, in another sign that investors are getting more hopeful over the government’s management of the country’s debts.

The Treasury said Thursday it sold €2.44 billion in 10-year bonds at an average interest rate of 4.92 per cent, compared with 5.2 per cent in the last such auction Feb. 21.

It also sold €2.01 billion in 5-year bonds at 3.57 per cent, compared with 4.12 per cent Feb. 7. It also placed €569 million of 3-year bonds at 2.63 per cent from 2.71 per cent Jan. 17.

Spain’s borrowing rates have fallen recently, partly on the back of the government’s deficit-reduction program.

However, the country remains stuck in recession and has unemployment of 26 per cent.