M&G's Riddell: Spain's safety from debt crisis 'an illusion'

Spain is facing the same danger of default as Greece, Ireland and Portugal, said M&G's Mike Riddell, following the lacklustre Spanish government bond auction yesterday.

According to Riddell, manager of the £37m M&G International Sovereign Bond fund, a 'wobbly' Spanish auction was the last thing the markets needed and highlighted Spain's rocketing borrowing costs. On the surface the results seemed positive, with the 2019 contracts covered 2.13 times and 2026s covered 2.57 times, but despite the higher yields on offer, the Spanish treasury only shifted €1.5bn (£1.3bn) of the 2026s, with the market looking for between €1.75bn and €2bn. The largest shock was when 10 year Spanish government bond yields jumped 20 basis points. "The firewall that markets th...