Spanish 10-year bonds slid, pushing yields to more than 7 percent, after yesterday’s Greek election failed to assure investors that politicians will be able to tame Europe’s debt crisis.
Italian securities also fell and German bunds erased a decline. Spain’s yield climbed to a euro-era record as a report today showed the nation’s bad loans increased in April. The bonds tumbled last week after Europe’s fourth largest economy requested as much as 100 billion euros ($126 billion) of aid on June 9 to support its banks. Greek bonds rose after pro-bailout parties won enough seats to control parliament.
Bad loans as a proportion of total lending at Spain’s financial institutions jumped to 8.72 percent in April from 8.37 percent in March, the Bank of Spain said on its website today. The 7 percent threshold on 10-year bonds helped trigger sovereign bailouts for Greece, Ireland and Portugal.