(Corrects bullet point to add decimal point)
* Spain raises 4.6 billion euros from three bonds
* Corruption scandal, weak economy hit investor confidence
* Yields on 2015 bond up 34.7 basis points from January sale
By Paul Day
MADRID, Feb 7 Political uncertainty over a
corruption scandal and revived concerns over the economic health
of the euro zone forced the Spanish Treasury to pay more to
borrow at a triple-bond auction on Thursday.
Demand was strong, however, and yields remained well away
from crisis levels.
Spain sold 1.948 billion euros ($2.6 billion) in a 2015
bond, with the yield rising to 2.823 percent, up from 2.476
percent at the last sale of that paper, in January. Yields also
rose on a 2018 bond and a 2029 bond that were sold at the
In all, it sold 4.6 billion euros worth of the three bonds,
slightly higher than the top end of its target range. Demand was
strong, continuing the trend from January when Spain saw yields
on shorter-term paper falling to ten-month lows.
It means that Spain had now sold over 18 percent of its
full-year medium- and long-term funding target.
"All things considered, the Treasury will be pleased it
managed to get all its debt out the door at an increasingly
sensitive time for Spain," said Nicholas Spiro, managing
director of Spiro Sovereign Strategy in London.
"However, the result of today's auction reflects the recent
shift in sentiment towards Spain: a marked increase in yields
after months of declines."
Yields have jumped back up to mid-December levels in Spain
and elsewhere in Europe, as an economic downturn spreads around
the entire euro zone.
Investors are also eyeing potential political instability in
Spain due to a widening corruption scandal involving officials
of the ruling People's Party, or PP.
Prime Minister Mariano Rajoy has denied any wrongdoing in a
graft scandal. A former PP treasurer, Luis Barcenas, appeared on
Wednesday for questioning by prosecutors who are looking into
reports that he ran a slush fund that allegedly channeling
business contributions to party leaders. Barcenas has denied the
accusations in the press.
($1 = 0.7387 euros)
(Additional reporting by William James in London; Editing by
Fiona Ortiz/Jeremy Gaunt)