Cracking the whip

19 April 2012 By Fiona Maharg-Bravo

Madrid is offering carrots and sticks to get the country’s regions to better control their budgets. These might be enough, but the market won’t really know until the end of the year.

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The Spanish treasury said on April 19 that it sold 2.5 billion euros ($3.3 billion) of two bonds, taking its issuance so far this year to half its gross target for 2012.
Spain, which has seen debt costs jump since early March, when Prime Minister Mariano Rajoy abandoned the deficit target previously agreed with its European partners, sold 1.1 billion euros of a bond maturing Oct. 31, 2014, at an average yield of 3.463 percent.
It also tested market appetite for a longer-term benchmark bond, due Jan. 31, 2022, selling 1.4 billion euros at a yield of 5.743 percent, up from 5.403 percent at the last primary auction in January.

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