Spain has a successful bond sale after tough week

Spain's Treasury has successfully raised Euro 2.1 billion ($2.62 billion) from bond markets, but at higher interest rates, as investors remain concerned that the country might need external help to shore up its troubled banking sector.

Spain's borrowing rates have risen sharply in recent weeks on fears over the country's creditworthiness.

The Treasury has paid an average interest rate of 6 per cent to sell Euro 611 million in key 10-year bonds, up from 5.7 per cent in the last such auction April 19.

The rate is still lower than the 6.1 per cent being demanded on the secondary market, where issued bonds are traded openly.

Demand for the 10-year bonds in Thursday's sale was nevertheless strong, about 3.3 times the amount on offer. The Treasury also sold bonds maturing in 2014 and 2016.