Thursday, July 19, 2012

Spain five-year borrowing costs hit highest since 1996

(Reuters) - Spain's five-year borrowing costs hit new euro-era highs at an auction on Thursday, sending the euro lower, as it struggles to convince investors it can control its finances, while France sold bonds of similar maturities at yields below 1 percent.

The yield on Spain's July 2017 bond rose to 6.459 percent, up from 6.072 percent when it was last sold just a month ago and the most Madrid has paid to borrow at that maturity for 16 years.

Costs jumped on all three bonds offered, with the longest-dated, a seven-year, coming in near the 7 percent mark beyond which other euro zone countries have been forced to seek aid.

Yields on 10-year Spanish debt trading in the secondary market climbed back above 7 percent after the auction, with the spread versus German Bunds, seen as the least risky euro zone asset, close to record highs at 580 basis points. Read More