Spanish treasury bonds attract solid demand at auction

The Spanish treasury on Thursday sold 4.024 billion euros (5.278 billion U.S. dollars) of treasury bonds on the market amid high demand in its first auction of June. The auction saw high demand for all bonds on offer, including 1.528 billion euros of bonds with 2-year lifespan which carried an average interest rate of 1.903 percent, below the 2.275 percent of the previous issue. A further 1.009 billion euros worth of bonds had a 3-year lifespan with an average interest rate of 2.7 percent compared to the previous 2.4 percent. The remaining 1.487 billion euros worth of bonds had 10-year lifespans and their average interest rate was 4.5 percent, slightly below the 4.6 percent of the previous issue. After the auction the Spanish risk premium climbed up to 292 points and Spain\'s interest rate on 10-year bond increased to 4.47 percent, both figures considerably below of those registered last summer when Spain\'s risk premium reached the 600 point mark and the interest rate 7 percent. With this auction the Spanish treasury has covered 60 percent of its financial needs for 2013 and in June it will hold three more auctions. Meanwhile the Spanish Minister of Industry, Energy and Tourism Jose Manuel Soria said the government would increase sales tax in some products (except from those related to tourism) by applying the reduced 10-percent tax on them instead of the current super reduced 4-percenttax. (1 euro = 1.31 U.S. dollars)