Spanish 3-Month Borrowing at Lowest Levels

Spain sold 3-month bills at the lowest yield on record at an auction on Tuesday as investors snatch up relatively high-paying instruments in expectation of a European Central Bank rate cut to counteract euro zone recession.

Spain’s borrowing costs have dropped steadily since last summer, when the country seemed to be heading into a financial crisis that could trigger an international rescue, despite a stubborn recession and scarce bank credit for businesses.

The Treasury sold 3 billion euros ($3.9 billion) of 3-month and 9-month paper, at the top end of its target.

The 3-month paper sold 855 million euros at an average yield of 0.120 percent, the lowest since the Treasury introduced the paper in 1991, at a bid-to-cover ratio of 3.8 after 3.3 last month.

The Treasury sold 2.2 billion euros of the 9-month bill, introduced in February, at a yield of 0.787 percent, down from 1.007 percent in March. The paper was 2.4 times subscribed, unchanged from last month.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.