Spanish bond yields rise above 7%

Mon, Jun 18, 2012, 01:00

Spanish 10-year government bond yields rose through 7 per cent today as yesterday's Greek election failed to ease investor concern that politicians will be unable to stem Europe's debt crisis.

The Spanish yield climbed to a euro-era record even after projections showed pro-bailout parties won enough seats to control Greece's parliament. German bunds erased a decline and Italian securities fell.

Spain requested as much as €100 billion of aid to support its banks on June 9th.

"The spotlight is now back on Spain and the market is focused on how they will solve their problems," said Christian Reicherter, a Frankfurt-based analyst at DZ Bank AG. "The market is worried about the bad loans at the Spanish lenders, which is pressuring the bonds. This goes to show that the European debt crisis isn't solved and we expect bunds to remain well supported."

Spain's 10-year yield climbed 26 basis points to 7.13 per cent at 9.32am Irish time the most since the euro was introduced in 1999. The 5.85 per cent security due January 2022 fell 1.66, or €16.60 per 1,000 face amount, to 91.26.

The yield on German 10-year bund was little changed at 1.43 per cent after jumping as much as 11 basis points to 1.55 per cent.

Italy's 10-year yield climbed 13 basis points to 6.06 per cent.

Bloomberg