Spain reduces borrowing needs in 2013

Spain reduces borrowing needs in 2013 to ?300 bln, expects easier year in interest rates

Associated Press

MADRID (AP) -- Spain's Treasury says it plans to borrow €230 billion ($300 billion) in 2013— down from €250 billion last year — and is expecting to pay lower interest rates than those that battered the country in 2012.

Spain's borrowing costs have dropped sharply from unsustainable highs last year after the European Central Bank pledged to help countries such as Spain by buying up their short-term bonds. The interest rate on Spain's 10-year bond — an indicator of investor appetite — hit a high of 7.54 percent in July but is now trading at 5.05 percent.

The Treasury said Tuesday net borrowing, after existing loans are refinanced, would be €71 billion. Spain faces its first test of market sentiment of 2013 on Thursday when it seeks up to €5 billion in bonds.

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