Spain Regional Rescue Risks Tipping Point on Yields: Euro Credit

Spain’s plan to help cash-strapped regions sell debt risks piling additional liabilities on the central government as borrowing costs approach the level that pushed other nations into bailouts.

The government is under pressure to devise a way to help the nation’s 17 regions regain access to capital markets. Yields on 2013 debt issued by Catalonia, the biggest and most-indebted region, traded at 8.3 percent today, compared with 3.6 percent for equivalent Spanish securities and 4.3 percent for state-guaranteed bonds.