Aug. 2 (Bloomberg) -- Spain sold 3.13 billion euros ($3.84 billion) of bonds today, exceeding a target of 3 billion euros even as borrowing costs rose before a European Central Bank policy makers’ meeting to discuss ways to ease the debt crisis.
The Treasury in Madrid sold its 10-year benchmark bond at an average yield of 6.647 percent, compared with 6.430 percent at the last auction on July 5, and debt maturing in October 2016 at an average rate of 5.971 percent, compared with 5.536 percent last month. A July 2014 bond was sold to yield 4.774 percent.
Demand for the 10-year securities was 2.4 times the amount sold, down from 3.18 times in July, while the bid-to-cover ratio for the 2016 bonds was 2.72 compared with 2.56. It was 3 times for the 2014 securities.
Spanish debt surged from euro-era lows after ECB President Mario Draghi last week said he will do whatever is needed to defend the euro. The central bank meets as European leaders debate the role it could play alongside European rescue funds to protect the area’s largest economies’ access to markets.
The yield on Spain’s 10-year bonds fell 5 basis points to 6.66 percent at 10:57 a.m. in Madrid after the auction. That left the gap with similar German maturities at 5.28 percentage points, compared with a record 6.5 percentage points on July 25.
Prime Minister Mariano Rajoy will hold a news conference in Madrid after 2 p.m. with Mario Monti as his Italian counterpart tours Europe to rally support for efforts to bring down borrowing costs. In Finland yesterday, Monti said the euro-area’s permanent rescue fund should have access to ECB liquidity via a bank license, challenging German policy makers to back more actions to tame the debt crisis.
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