Spain's borrowing rates tumbled today as it raised €2.507 billion in an auction of three- and six-month bills, luring strong demand from investors.
Investors put in bids for €13.6 billion of bills, outstripping supply more than five times and allowing the Treasury easily to meet its goal of raising €1.5-2.5 billion, Bank of Spain figures showed.
The rate paid dropped sharply from the previous comparable auction on December 20, easing to an average 1.285% from 1.735% for three-month paper and to 1.847% from 2.435% for six-month paper. It was the seventh debt auction in a row in which Spain's borrowing costs declined.
Buyers have been flush with cash since the European Central Bank last month extended nearly €500 billion in three-year loans to euro zone banks at rock-bottom rates. Euro zone governments have benefited from the liquidity when issuing sovereign debt, especially short-term debt.
