SPAIN has met its target at the latest bond auction with better-than-expected investor demand but at much higher rates.
The treasury managed to sell 3.75 billion euros of government bonds with investors ordering twice the amount sold, easing some of the worst fears about the euro zone debt crisis.
But it proved expensive for Spain which had to pay the highest amount to borrow in over a decade.
In particular, it sold 1.2 billion euros in three-year bonds at a marginal rate of 5.203 percent which marks the highest yield since 2000.
It comes after the risk premium hit a euro-zone record on November 17 when the Treasury was forced to offer a yield of over seven percent on 10-year bonds for the first time since 1997.
Spain has now covered 93.4 percent of its net borrowing requirements for the year and needs to issue only a further 6.2 billion euros this month with auctions scheduled to sell bonds on December 15 and bills on December 18 and 20.