Spain experiencing the pain of investor shun as bids remain scarce for its latest offering...
Spain came close to its first debt auction failure on Tuesday,
highlighting the funding problems for weaker eurozone economies.
The government’s difficulties in selling €6.44bn ($7.96bn) in one-year
and 18-month bills sparked worries over its 10-year debt auction on
Thursday.
Madrid had planned to issue €8bn, but only just attracted that amount
of bids, with yields at record highs. This prompted debt managers to
reduce the size of the sale by €1.56bn. Normally a government bill
auction would be covered at least 1.5 times.
Steven Major, head of fixed income at HSBC, said: “The Spanish auction
was very disappointing and does not bode well for further issuance.
It’s becoming more apparent just how difficult it is for Spain, which
is a big worry so soon after the launch of the international rescue
package.
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