Greek and Portuguese government bonds paced declines by euro-region peripheral-nation debt after demand at a Spanish bond auction fell. Investors demanded an extra 6.82 percentage points of yield to hold Greek 10-year debt instead of similar-maturity benchmark German bonds, 21 basis points more than yesterday. The yield on Portugal’s 10-year security jumped 15 basis points to 5.93 percent, with the Irish 10-year yield six basis points higher at 6.48 percent. The bund yield was little changed at 2.45 percent. Spain sold 3.85 billion euros ($5.4 billion) of bonds maturing in 2025 and 2032, less than the maximum target, data from the Treasury showed today. Investors bid for 1.44 times the amount of 15-year securities sold, down from a bid-to-cover ratio of 2.57 at a July auction. “People have not been too impressed, I would not disagree with that,” said Mohit Kumar, a fixed-income strategist at Deutsche Bank AG in London. “But today was a big supply day so it was particularly weak. Longer term, I still see Spain as decent. ” France auctioned about 8.5 billion euros of 2012, 2013, 2015 notes and almost 2 billion euros of index-linked securities. The yield on the 10-year Spanish bond climbed five basis points to 4.12 percent. The spread over bunds increased four basis points to 1.66 percentage points. “Demand seems weaker than at the previous auctions,” Chiara Cremonesi, a fixed-income strategist at UniCredit SpA in London, wrote today in a report. “Investors will continue to carefully monitor Spain over the next few months.” To contact the reporters on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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