The highly indebted region of Valencia sold 500 million euros of six-month bonds on Thursday, but had to pay yields of seven percent. That's higher than the cost of debt for the three euro-zone countries that have come to symbolize the financial crisis: Greece, which pays 4.947 percent; Portugal, 2.226 percent; and Ireland, 0.988 percent.
Valencia carried out the operation to refinance a debt that was due to be repaid today, and will be followed by another two repayments: 500 million euros on May 9, and 473 million on May 27. In total, the region will have to renew five billion euros of public debt over 2012.
Given that its rating has been lowered to junk-bond status, the region has repeatedly warned that it will need help from the central government to cope with its finances.
Regional government sources on Thursday only went so far as to say that the high yields were the conditions being demanded by the market, and that given the situation, it would have been more serious if the region had been unable to refinance.