Spain Bond Yields Surge Above Unsustainable 7%

The yield on Spain’s 10-year notes rose above 7%, a level at which most experts believe the nation cannot survive without a bailout. Spain will receive $125 billion from its neighbors and the IMF. But, most of that will be passed on to the nation’s banks, and the bailout will increase Spain’s indebtedness. Yesterday, Spain’s sovereign paper was downgraded by Moody’s

According to MarketWatch:

The yield on Spain’s 10-year government bond reached an all-time high of 7% on Thursday, with Tradeweb reflecting the yield at 7.01%, versus a close of 6.772% the prior day. The move came in the wake of a three-notch Moody’s Investors Service downgrade for Spain, which put its debt rating one notch above junk status. Italy’s yield  was at 6.34% as the country prepared to auction medium- and long-term debt.

Douglas A. McIntyre