MADRID, Oct. 19 -- The Spanish treasury on Thursday successfully auctioned treasury bonds worth 4.614 billion euros at a lower interest rate than September.
A total of 1.513 billion euros worth of 10-year bonds went for average interest rates of 5.458 percent, below the 5.666 percent of the auction held in September. Marginal interest also fell from 5.7 percent to 5.468 percent.
1.637 billion euros of the bonds carried a three-year lifespan and fetched an average interest rate of 3.227 percent, lower than the 3.85 percent of the previous issue. The marginal interest rate also fell in this case, from 3.919 percent of the previous auction to 3.266 percent.
The remaining 1.464 billion euros of the bonds carried a four- year lifespan and fetched average interest rates of 3.977 percent, again below the 4.603 percent of the previous issue held on September 6. The marginal interest rate was 3.999 percent, also favorable when compared to the previous rate of 4.694 percent.
Demand for the 10-year-bond was relatively weak, hinting investors do not have full confidence in the long term solvency of the Spanish economy. In the case of the three-year bonds, demand doubled the supply and while demand outstripped supply by 2.6 for the four-year bonds.
Thanks to Thursday's bond auction and the previous issue from Tuesday, the Spanish treasury has successfully placed more than 9 billion euros on the market in a week.
Meanwhile, trading remains calm on the Spanish stock market amid rumors of an European Union (EU) bailout for Spain with the risk premium falling below 390 points for the first time since April on Wednesday.
EU heads of government and state are currently meeting in Brussels to discuss reforms that will help Europe to overcome the economic crisis. In this context, the Spanish government had said they were willing to ask for more EU assistance, but did not specify when.