Spanish bailout on cards despite €3bn debt sale

Spain comfortably sold €3bn of short-term debt yesterday, but yields inched up slightly from a month ago, holding at high levels as the government considers calling for a rescue package.

The Treasury sold €1.4bn of a three-month bill, and €2.6bn of a six-month bill, which together met its €4bn target.

Spain remains at the centre of investor concerns over the eurozone crisis as it struggles to make tough deficit cuts amid a recession and clean up a distressed banking sector.

The average yield on the three-month bill was 1.203 per cent compared with 0.946 per cent a month ago, and rose to 2.213 per cent from 2.026 per cent at auction in August on the six-month bill.