Resurgent Spain enjoys negative 5-year borrowing rates

ion euros ($1.0 billion) in five-year bonds at an average rate of return of minus 0.286 percent, the bank said in a statement.

It was the first time since Spain's crippling economic crisis that the country had secured a negative interest rate on its medium-term debt.

That indicated investors were so confident in Spain's financial prospects that they were willing effectively to pay to hold the bonds.

Spain's economic output is recovering from five years of stop-start recession, though unemployment remains painfully high, close to 24 percent at the last count.

In a sale of short-term debt on April 7, Spain had secured its first negative interest rate ever, on its six-month bills.

The eurozone's leading economies Germany and France have also recently issued five-year bonds with negative interest rates -- Germany in February and France in April.

But the news was particularly striking in Spain, which in mid-2012 saw key interest rates soar to danger levels as investors took fright.

That finance crisis stirred fears for the stability of the whole eurozone and raised pressure on Spain to seek a full bailout.

Madrid resisted the full sovereign bailout but eventually got a 41-billion-euro rescue package for its financial sector.

Spain's conservative government says the improvement in the country's economic figures since 2013 is thanks to its tough money-saving measures, which sparked mass street protests.

But Spain and other eurozone countries have also been boosted by the European Central Bank's measures to get cash flowing again in the single currency area.

The record low interest rate of the euro has helped make European exports as well as tourism in the region cheaper.

Spain in particular has benefitted from this, with its exports posting strong growth, while the tourism sector -- which contributes about a tenth of the country's economic output and one in nine jobs -- added another boost.

Official data show that the country's growth is accelerating, as its economy expanded by 0.9 percent in the first three months of this year -- the seventh consecutive quarter of growth and the biggest expansion since the fourth quarter of 2007.

Meanwhile, rates on benchmark 10-year bonds of eurozone countries on the secondary debt markets rose generally on Thursday as investors sold off their holdings following several months of good returns, analysts said.

Spain's 10-year bond was changing hands for a rate of 1.93 percent. That was slightly higher than Wednesday's rate of 1.895 but still far lower than the danger levels reached at the height of its crisis in 2012.