Spain’s borrowing costs surged at its first auction since becoming the fourth euro member to seek a bailout, with the Treasury paying the most for at least eight years to sell debt for one year.
The Treasury sold 2.4 billion euros ($3 billion) of 12- month bills at an average rate of 5.074 percent, 2.1 percentage points more than the 2.985 percent paid on May 14. It also sold 639.3 million euros of 18-month debt at 5.107 percent, compared with 3.302 percent last month, the Madrid-based Bank of Spain said today.
As part of efforts to restore confidence, Prime Minister Mariano Rajoy’s government, in power since December, has commissioned an independent stress test of banks to help it determine how much of the 100 billion-euro European loan it will need to tap. The reports are due on June 21.