Spain sold 2 billion euros of bonds on Thursday, hitting its target for the auction with borrowing costs falling on two medium-term issues but rising for a rare long bond.
Spain has already completed its 2012 funding plan and the relatively small amount on offer attracted strong demand from the market. Analysts said the real test would come early next year.
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Madrid faces a daunting 2013 refinancing bill.
The longest-dated bond offered on Thursday, due 2040, sold 540 million euros and was 2.1 times subscribed, selling at an average yield of 5.893 percent, compared with 4.738 percent when it was last sold in March 2009.
Madrid sold 681 million euros of three-year bonds at an average yield of 3.358 percent, down from 3.390 percent when the issue was last sold on the primary market on December 5. Demand was high, with the bond 4.8 times oversubscribed.
The Treasury also sold 803 million euros of five-year bonds at a yield of 4.200 percent, below the November yield of 4.477 percent.
"At face value, it shows that it's becoming trickier for Spain to refinance their debt but it's not straightforward to draw any conclusions from this auction given that it's just a week or so before Christmas and liquidity is thin," said Michael Leister, senior rate strategist at Commerzbank in London.
"The first auction of next year is going to be really important as a signal."
In the secondary market, Spanish yields rose off their lowest levels following the auction with the 10-year edging up to 5.39 percent, still slightly lower on the day but above the 5.35 percent seen just before the results were announced.
The European Central Bank's pledge to buy euro zone government bonds to shore up the currency area, if needed, has allowed the latter part of the year to pass without much incident in debt-raising terms.
"Buying flows also came from dealers who bet on the activation of the European Central Bank's OMTs (Outright Monetary Transactions) early next year," said Annalisa Piazza, economist at Newedge in London.
(Reporting by Madrid Newsroom; Writing by Mike Peacock; Editing by Catherine Evans)