MADRID – Spain has had to pay higher interest rates to raise €4.6 billion (US$6.2 billion) in the first debt auction since a scandal over alleged slush fund payments in the ruling Popular Party broke last week.
The Treasury sold €1.95 billion in two-year bonds at an average rate of 2.82 per cent, up from 2.48 per cent on Jan. 10. It sold €2.07 billion at a rate of 4.12 per cent, up from 3.77 per cent on Jan. 17. It placed another €593 million at 5.79 per cent, compared with 5.55 per cent Jan. 10.
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Overall demand was more than double the amount offered.
Spain’s borrowing costs have dropped sharply in recent months after European leaders took measures to bolster investor confidence. But recent allegations of corruption have shaken the Spanish government despite its denials of wrongdoing.
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