Spain saw pretty good demand at its Tuesday morning auction of short-term debt, but its borrowing costs nearly doubled.
From Reuters with our emphasis:
The [Spanish] Treasury sold 725 million euros ($951.53 million) of the 3-month bill and 1.2 billion euros of the 6-month bill, hitting the top end of the target range for both of 1-2 billion euros.
Yields spiked from the last time they were sold in March. The average yield on the 3-month bill was 0.634, up from 0.381 percent, while it was 1.580 percent on the 6-month bill compared with 0.836 percent a month ago.
The Treasury saw solid demand for the paper, with the bid-to-cover ratio, an indicator of investor demand, at 7.6 on the 3-month bill after 3.5 a month earlier, and 3.3 on the 6-month paper compared with 5.6 in March.
As an aside, we note that Spain is paying 1.6 per cent to borrow for 6 months while Germany has set its coupon for tomorrow’s 30-year debt sale at 2.5 per cent (h/t ReutersJamie). An eloquent contrast.