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Investors back Spain with bond spree

In a sign of further-strengthening market confidence in Spain, the country's Spain's borrowing costs with the sale of €5.832 billion in short-term debt on Tuesday.

Investors back Spain with bond spree
Confidence in Spain has picked up again after uncertainty caused by recent Italian elections. Photo: Victor1558/Flickr

The sale offered further encouragement for the eurozone's fourth-biggest economy, which last year resisted speculation that it would need a sovereign bailout to rescue its public finances.

Demand for 12- and six-month Spanish treasury bills was more than double the supply and investors bought more than the government's upper target of €5.5 billion euros ($7.2 billion), the central bank said in a statement.

The rate of return demanded by investors who bought €1.977 billion of six-month bills fell to 0.794 percent from 0.859 percent in the last comparable sale on February 12.

Investors also bought €3.855 billion worth of 12-month bills at a rate of 1.363 percent, down from 1.548 percent on February 12.

Financial markets had reacted nervously last week to an uncertain election result in Italy, amid lingering concerns for the stability of the eurozone, and a ratings downgrade by Fitch has since raised pressure slightly on borrowing costs for Italy, the third-biggest eurozone economy.

But Spanish confidence indicators have strengthened again in recent days.

The rate of return on its benchmark 10-year treasury bond in the secondary market has fallen below 5.0 percent for the first time since 2010.

Another key measure of confidence, the rate of return on Spain's 10-year bond compared with that of benchmark German Bunds, also eased after Tuesday's sale.

That measure, known as the risk premium, fell to 322 basis points from 324 on Monday evening — its lowest level in more than a year.

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Elderly deaf and dumb couple face eviction over son’s debt

The proposed eviction of an elderly couple who are deaf and dumb and can’t read or write because they unwittingly acted as guarantors for their son’s bank loan has sparked public outcry in Spain.

Elderly deaf and dumb couple face eviction over son's debt
Photo: Benjamin Pleguezuelos / change.org

Bankia made the decision on Monday to cancel the eviction of an elderly couple who are disabled and illiterate after bowing to public pressure and a change.org petition that collected 220,000 signatures in just 48 hours.

Last month Maria del Carmen Lebron, 81, and Antonio Pleguezuelos, 76 who have lived in their home in the Madrid suburb of Pinto since 1970 were given an eviction notice as Bankia called in an outstanding debt owed by their son Gregorio.

It was only then that they learnt that in 2005 they had signed documents acting as guarantors for a €219,500 mortgage for their son, even though they hadn’t understood what they were signing.

In fact the mortgage agreement states that the contract was read out to the couple by a notary and that they had fully understood and agreed the terms. Their lawyers now argue that the agreement was invalid as both are completely deaf – Antonio lost his hearing when he was four years old after falling ill with meningitis and Maria del Carmen was deaf since birth.

When their son lost his job in the crisis and fell behind on mortgage payments the bank called in the debt and demanded they leave their house by January 30th 2017.

  Their eldest son Benjamin made the case public starting a petition on change.org which garnered more than 200,000 signatures in just 48 hours and made headlines across Spain.

On Monday, Bankia announced that it had stopped the eviction order and would cancel the debt “given the particular vulnerability observed in this case”.

The case highlights the still ongoing plight of indebted homeowners suffering years of unemployment as a result of Spain’s economic crisis.

During the peak of the eviction crisis as banks called in loans, hundreds of families were evicted each day. In 2013, some 50,000 families were turfed out of their homes.

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