AlQa'dah 30, 1433, Oct 16, 2012, SPA - Spain on Tuesday auctioned 4.9 billion euros (6.4 billion dollars) of government bonds at slightly lower interest rates, despite an announcement by the ratings agency Standard & Poor's that it was downgrading the credit ratings of several Spanish banks, DPA reported. The banks included the two biggest, Santander and BBVA. S&P said it downgraded them following a downgrade of Spain's sovereign credit rating, which the agency dropped to near junk level last week. However, market pressure on Spain has relaxed recently amid expectation that the European Central Bank will buy Spanish bonds to help keep the country's borrowing costs in check. One-year bonds had a yield of 2.86 per cent, down from nearly 3 per cent at the previous auction. Eighteen-month bonds had a yield of 3.07 per cent, down from 3.15 per cent. The demand for the bonds was three times the offer. Prior to the bond sale, the spread measuring the difference between Spanish and German 10-year bonds went down by four basis points to 431 basis points.
