Spain sold 3.31 billion euros ($4.72 billion) of bonds at higher interest rates after the yield on the country’s 10-year bond approached the 7 percent mark that heralded the bailouts of Greece, Portugal and Ireland. The Treasury in Madrid sold 2.2 billion euros of April 2014 bonds at an average yield of 4.813 percent, compared with 4.291 percent when it sold similar debt on July 7. It also auctioned 1.1 billion euros of January 2015 bonds to yield 4.984 percent. The Treasury had aimed to sell a maximum of 3.5 billion euros. Spanish 10-year yields have jumped about 70 basis points to a high of 6.46 percent since a euro region leaders’ summit on July 21 failed to convince investors the spread of the debt crisis can be halted by a so-called selective default for Greece. Spanish 10-year bonds yielded 6.07 percent after the auction as the spread, or difference, between Spanish and German bonds of that tenor narrowed to 362.6 basis points. Finance Minister Elena Salgado attributed turmoil this month to thin volume because of the vacation season. “We had anticipated volatility in August as often occurs when trading volumes are low,” she said told reporters in Madrid late yesterday evening after an emergency meeting with Prime Minister Jose Luis Rodriguez Zapatero to discuss the worsening fiscal crisis. Demand for the three-year bonds today was 2.14 times the amount sold, compared with 2.29 times in July. Today’s sale will likely be Spain’s only bond auction this month. The country still needs to sell about 38 billion euros in debt by the end of the year and has completed 60 percent of its 2011 financing, less than the euro-area average of 67 percent, according to a report by UniCredit SpA. To contact the reporters on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net; Todd White in Madrid at @bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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