Borrowing rates soar for Spain

Spain has had to dig deeper in its pockets to tap the bond market - with a eurozone rescue loan in the works for the country's ailing banking sector. Government bonds have been sold at record interest rates. Spainon Thursday was able to sell 2.2 billion euros ($2.8 billion) of government debt. But the auction of short- and mid-term bonds came at a cost, as Madrid was forced to agree to record interest rates. Five-year bonds had a yield of 6.1 percent, the highest since the introduction of the euro currency back in 1999. There was also a rise in borrowing costs for three- and two-year bonds, which were sold at an interest rate of 5.5 and 4.7 percent respectively. The positive news was that Spain was able to tap the bond market at all at such a crucial time. The country hopes to get a eurozone rescue loan to help domestic banks on their feet again. Two independent audit companies had been tasked with specifying the exact amount needed by the ailing banking sector. The government is hopeful that more fiscal clarity will eventually calm markets. However, if Spain adds a desired 100-billion-euro banking loan to its books, public debt will expand by abut 10 percent, reaching a disconcerting 90 percent of overall economic output.