23 APR 2011
By Juliet Samuel | City A.M.
SPAIN saw yields rise at its latest bond auction yesterday, raising fears that Eurozone debt contagion could spread to a country widely considered too big to bail out.
Madrid sold €3.37bn (£3bn) of ten and 13-year dated bonds, at the top end of its target range on the back of solid demand, but it had to pay 31 basis points more for the cash than at its last equivalent sale in March.
Ten-year yields reached 5.47 per cent versus 5.16 per cent in March.
Spanish yields continue to creep up in defiance of widespread claims that Madrid is a bulwark against any further spread of the debt panic gripping the Eurozone. “Spain spreads are widening and wobbling,” said Newedge’s Bill Blain. “We all know that if Spain falls… game over.”
Meanwhile, the growing expectation of a Greek default drove up the cost of insuring Athens’ debt still further to over 1740.7 basis points, up 144.1 points from yesterday’s close.
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