This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-15771776
The article has changed 7 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
Spain's borrowing costs hit 14-year high | |
(40 minutes later) | |
Spain's borrowing costs have risen at its latest bond auction, as Spaniards prepare to vote for a new government to tackle its financial crisis. | |
The average yield on 10-year government bonds soared from 5.433% in October to 6.975% - the highest since 1997. | |
A high yield indicates investors may not have confidence in the government to fully repay its debts. | A high yield indicates investors may not have confidence in the government to fully repay its debts. |
The figure is perilously close to 7% - the level at which other eurozone countries have had to seek bailouts. | |
Italian 10-year bond yields passed 7% earlier this month. | |
Opinion polls indicate that the opposition Popular Party will win Spain's general election on Sunday, ending seven years of Socialist government. | |
'Dreadful' | |
The Spanish government sold 3.56bn euros (£3.04bn; $4.79bn) worth of bonds out of a maximum target of 4bn euros. | The Spanish government sold 3.56bn euros (£3.04bn; $4.79bn) worth of bonds out of a maximum target of 4bn euros. |
The auction attracted bids worth 1.5 times the securities offered. The so-called bid-to-cover ratio was down from 1.8 in October. | |
"The result was dreadful. They didn't manage to raise the full amount and the bid-to-cover is really poor," said Achilleas Georgolopoulos, rates strategist at Lloyds in London. | |
"The fiscal profiles of Spain and Italy are different but their yields seem to be aligning now." | |
A similar auction in France saw French short-term borrowing costs - for its two and four-year bonds - also rise by about half a percentage point. |