Spain fears escalate as investors flee govt bonds

Fears over Spain escalated yesterday as investors sold off government bonds on warnings of funding problems for the country's companies and banks.

The Spanish 10-year bond yield rose nearly a quarter of a point yesterday, to 4.67%. The benchmark sovereign bond now yields about 2 percentage points higher than the equivalent German bund. Spain's Treasury secretary and a leading banker admitted companies and banks were having difficulties raising funds, The Financial Times reports. Francisco González, chairman of BBVA, Spain's second-biggest lender, says: "For the majority of companies and Spanish financial firms, international capital markets are closed." Carlos Ocana, treasury secretary, added the credit freeze affecting Spani...