Spanish Funding Costs Drop 50% as Investors Ignore S&P Cut

Spanish borrowing costs plunged at an auction as investors ignored downgrades by Standard & Poor’s to snap up bonds across Europe amid evidence that the economic outlook may be improving.

Spain paid an average 2.049 percent to sell 12-month debt today compared with 4.05 percent on Dec. 13. It sold 18-month paper at 2.399 percent, down from 4.226 percent last month. The euro region’s bailout fund also sold bonds, with investors bidding for 3.1 times the amount available.