Interest rates jump in Spanish bond sale

Nov. 16, 2010 - CHRON.COM -

Spain has had to pay increased interest rates to raise nearly euro5 billion ($6.81 billion) in a sale of 12- and 18-month bills as investors remained uncertain over whether the country will be affected by debt crises in Ireland and Portugal.

The central bank says the treasury raised euro3.73 billion in 12-month bills but at an average interest rate of 2.4 percent, up from 1.9 percent in the last such auction in September.

It raised euro1.24 billion in 18-month letters, paying an interest rate of 2.7 percent compared to 2.1 percent last month.

The bank said demand was nearly twice the amount sold Tuesday.

The sale came as speculation continued over whether the European Union will have to bail out Ireland and Portugal, which like Spain are seriously burdened with debt.