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A man reads news paper collages during a trade unions demonstration against the government Economic measures and new labor reforms in central Madrid, Wednesday, June 20, 2012. After years of insisting its banks were among the healthiest in Europe, Spain recently acknowledged it will need a rescue package. But investors are now more concerned that the country itself may have to be bailed out and this could seriously test the strength of the entire European Union\'s finances. Papers read \'My biggest success the rescue, will be paid by workers\'.(AP Photo/Daniel Ochoa de Olza)

Spain raises more money than targeted in bond sale at sharply higher interest rates

MADRID – Spain has successfully raised €2.2 billion ($2.8 billion) in a debt auction that saw strong investor demand, though it had to pay sharply higher interest rates due to concern that the country may eventually need a bailout.

The auction Thursday came before two auditing firms are to report on how much Spain’s troubled banks may need in bailout money.

The Treasury sold €602 million ($765 million) in five-year bonds at an average interest rate of 6.07 per cent, up from 5.4 per cent in the last such auction June 7. It sold €918 million ($1.2 billion) in three-year bonds at 5.46 per cent, up from 4.3 per cent, and €699 million ($888 million) in two-year bonds.

Overall, demand was between three and four times the amount on offer, indicating strong investor interest.

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Abbey Westbury

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