Spain, Italy raise €9-bn in bond sales; but yields rise
14 Jan 2011
Allaying fears of an immediate financial crisis, debt-laden euro zone nations Spain and Italy yesterday successfully raised €3 billion and €6 billion respectively from the international bond market, but at higher yields than their previous issues.
Portugal, another troubled euro zone member, raised €1.25 billion through debt auction Wednesday that saw a strong demand from investors, boosting the market sentiment for Thursday's bond auctions.
The first bond sales in 2011 had a soothing effect on the European markets as they raised confidence in the ability of weaker euro zone members to service their debts.
Spain, the fourth-largest euro zone economy has been in focus along with neighbour Portugal for a potential international bailout, as both the nations have been struggling to shore up their economies from sovereign debt crises.
Both Spain and Portugal have been consistently denying the need for a financial rescue, reiterating they can deal with the present crisis on their own. (See: Portugal denies need for EU bailout; says 2010 budget deficit beats forecast \ Spain approves new austerity measures; says no need to tap EU fund)
Wednesday's and Thursday's debt auctions were considered to be key market tests for the weaker euro zone nations.
The Spanish treasury raised €3 billion through an auction of 5-year government bonds. The demand was 2.1 times more than the issue size, while it was 1.6 times in November.
