Spain raises €2bn in debt auction

Spain has successfully raised €2.2 billion (£1.7 billion) in a debt auction that saw strong investor demand, though it had to pay sharply higher interest rates due to concern that the country may eventually need a bailout.

The auction came before two auditing firms are to report on how much Spain's troubled banks may need in bailout money.

The Treasury sold €602 million in five-year bonds at an average interest rate of 6.07 percent, up from 5.4 percent in the last such auction June 7. It sold  €918 million in three-year bonds at 5.46 percent, up from 4.3 percent, and €699 million in two-year bonds.

Overall, demand was between three and four times the amount on offer, indicating strong investor interest.

AP