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Spain meets 2012 bond-selling target

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MADRID, Nov 8 AFP

November 08 2012, 10:23PM

Spain has met its 2012 bond sales target in an auction, strengthening the government's hand as it resists seeking an international bailout.

The Spanish Treasury raised 4.76 billion euros ($A5.88 billion) in a sale of three-, five- and 20-year bonds, the central bank reported on Thursday, taking the total value of medium- and long-term bonds sold this year to 86.46 billion euros.

This exceeded the government's target of 85.9 billion euros, the amount it sought to raise in bond issues to finance its operations throughout 2012.

Spanish Prime Minister Mariano Rajoy has kept world markets on edge as he ponders whether to trigger a eurozone rescue, in which the European Central Bank (ECB) would buy Spain's bonds to drive down Madrid's financing costs.

On Tuesday Rajoy had all but ruled out seeking a bailout in 2012 but vowed to do so if faced by persistently high borrowing costs.

"If we see that during a long period Spain is financing itself at very high prices then we would have to ask for it," the prime minister said but struck a confident note as the borrowing target was due to be met.

After months of market tension, Spanish borrowing costs had tumbled since the ECB outlined plans in September to buy an unlimited amount of stricken states' bonds if they submit to strict eurozone conditions first.

In Thursday's auction, the yield eased to 3.66 per cent on the three-year bonds from 3.676 per cent in the last comparable sale on September 6, and to 4.68 per cent on the five-year bonds from 4.766 per cent on July 19.

On the 20-year bonds, the yield was 6.328 per cent. In the last sale of bonds with the same 2032 maturity date, the rate was 4.541 per cent. That sale was in October 2010, before the worst of the eurozone debt crisis spread to Spain.