* Madrid pays more to sell 3-, 5-, 13-year bonds
* Investors wary after hawkish signal from U.S. Federal
* Ailing Spanish economy may gradually pressure yields, says
By Manuel María Ruiz
MADRID, May 23 Spain paid higher rates on
medium-term debt for the first time since early February at an
auction on Thursday, as investors reacted to signals that the
United States could scale back its monetary stimulus.
Yields rose on bonds maturing in three, five and 13 years,
but Spain met its target of 4 billion euros ($5.15 billion) and
has now completed 57 percent of its issuance plan for 2013.
Spanish yields have fallen steadily for months as an
investor hunt for higher returns has kept demand high.
They have chosen to ignore the nation's sickly economy and
focus instead on stimulus programmes from the ECB and other
major central banks that have cut returns on core sovereign
bonds as well backstopping investments in riskier debt.
That prop was weakened on Wednesday by Federal Reserve
chairman Ben Bernanke, who said the U.S. monetary authority
could soon temper its bond-buying programme.
Estefania Puente, analyst at Cortal Consors in Madrid, said
investors drew back in anticipation of the programme being cut,
meaning demand was weaker than in recent auctions.
Raj Badiani, of IHS Global Insight, said persisent economic
problems could sent yields higher as the year progresses. Spain
is deep in recession and already sky-high unemployment rates
continue to rise.
"We could see yields creeping up in the second half of this
year as markets despair at the lack of economic growth," he
said, noting that Madrid was now aggressively selling
At Wednesday's auction, demand fell and yields rose on all
three maturities. The longest-dated bond, due in July 2026, sold
for at 4.540 percent, up from 4.336 percent the last time it was
auctioned on May 9.
The yield on Spain's benchmark 10-year bond
rose on Thursday to 4.253 percent from around 4.180 at