Strong demand in Spanish sale

SPAIN saw strong demand for €3.95bn (£3.5bn) of medium-term bonds yesterday, though a broad drop in risk appetite and lingering uncertainty over how talks on fresh aid for Greece will pan out kept yields high.

In a litmus test of investor appetite for peripheral Eurozone debt as policymakers thrash out a plan to avert a Greek default, the 2014 bond, with a 3.4 per cent coupon rate, sold €2.75bn euros at an average yield of 4.037 per cent. That compared with 3.568 per cent at the previous auction in April, but the bid-to-cover rate rose to 2.5 compared with 1.8.