December 9, 2009 / 2:36 PM / in 8 years

Spanish/German yld spread widens after S&P action

LONDON, Dec 9 (Reuters) - The premium investors demand to hold 10-year Spanish government bonds rather than euro zone benchmark German Bunds rose to the most since July on Wednesday after rating agency Standard & Poor’s cut the country’s outlook.

Ten-year Spanish bonds ES10YT=RR yielded 69 basis points over equivalent-maturity Bunds EU10YT=RR, around 9 basis points more on the day.

S&P revised the outlook on Spain to negative from stable and warned that the country faced a risk of a debt downgrade in two years if the government did not take tough action. [ID:nGEE5B81MK]

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