Spain's treasury bond offering took a turn for the worse Thursday.
The treasury managed to place 2.98 billion euros worth of bonds, just short of the 3 billion euro target fixed for the listing.
Demand for the bonds tanked as interest rates rose. Spain raised 1.359 billion euros through two-year bonds with an average interest rate of 5.204%, compared to 4.335% at the last offering in June, representing a 20% rise in interest rates.
Demand was 1.9 times the offering Thursday, compared to 4.26 times in the previous listing.
The treasury placed 1.074 billion euros worth of five-year bonds, which fetched an average interest rate of 6.459%. That compares to 6.072% at the June 21 listing. Five hundred and forty seven million euros worth of seven-year bonds went off the block at interest rates averaging 6.701%, a 38% rise over the June equivalent.