Spain raises 4bn euros in surprise bond sale

Spain raised four billion euros ($5.3 billion) in a surprise issue of 10-year bonds on Wednesday, more than the two to three billion it had originally intended, the treasury said. The syndicated bond issue received strong demand of more than 7.8 billion euros with the bonds placed at an average rate of return for investors of 5.403 percent, the treasury said in a statement. The volume of demand and the interest of investors outside Spain, who bought 80 percent of the bonds issued, \"demonstrates the improvement of confidence in the solvency of the Spanish economy,\" it said. Thirty-nine percent of the bonds were bought up by private banks and 27 percent by \"central banks and official institutions\", the statement said, adding that \"the large presence of investors from Europe and Asia stood out.\" The banks that handled the bond sale were Barclays, BBVA, Deutsche Bank, Goldman Sachs, Santander and Societe Generale. The surprise bond issue came amid falling yields on government bonds from highly indebted nations on the eurozone periphery. With Spain set to slump into recession, the government has taken advantage of the situation to place greater amounts of debt than initially planned for the beginning of the year. Spain has already completed a quarter of its gross bond issue plan for this year, which totals 86 billion euros.