Spanish 10-year bond yield hits euro-era high after Fitch downgrades 18 domestic banks

By Abbey Westbury
June 12 2012 11:16 AM

CP18771256 — A journalist works in front of the Stock Exchange\'s main display while it shows Bankia values, in Madrid Monday June 11, 2012. After Spain\'s request for a European financial lifeline of up to a euro100 billion euros (25 billion) to save its banks the EU made clear the money is more than just a loan. Besides being paid back with interest, there will be strings attached for the Spanish government.(AP Photo/Daniel Ochoa de Olza)

MADRID – Spain’s benchmark borrowing rate has risen to its highest since the country joined the euro currency after Fitch credit ratings agency downgraded 18 domestic banks

Spain’s 10-year bond yield traded at 6.78 per cent on Tuesday, according to data provider FactSet.

Spain agreed last weekend to take a European bailout for its banks, but investors are worried it will not solve the country’s problem as the government may have trouble paying the money back.

Fitch says in a statement that its downgrade of the banks was a result of a previous downgraded of the Spanish sovereign debt on June 7. Fitch says it had conducted stress tests, both on the Spanish banking sector as a whole and on individual banks, updating results from tests done in 2011.

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