HispanicBusiness

Two of the eurozone's leading economies -- Spain and France -- kept their borrowing costs down Thursday in a series of government bond auctions that marked a further easing in tensions surrounding the currency bloc's public debt market.

Despite recent credit downgrades, both Spain and France sold debt at favourable interest rates, with Madrid selling 4.6 billion euros ($6 billion) of government bonds in its seventh successful bond auction this year.

Spanish three-year bonds fetched a yield of 2.86 percent, down from 3.38 percent in the previous auction.

Spain, which is the eurozone's fourth biggest economy, has been at the center of the debt crisis that gripped the currency bloc for over two years.

Four-year Spanish bonds sold Thursday had an interest of 3.46 percent, down from 4.02 percent. The interest for five-year bonds dropped to 3.57 percent from 5.54 per cent.

At the same time, demand for French government paper was brisk, with an auction of medium-term bonds netting the treasury 7.9 billion euros. France is the eurozone's second biggest economy.

Average yields demanded by investors ranged from 2.44 percent on bonds with a maturity date in 2018 to 3.13 percent for bonds that mature in 2022.

Many people had feared that the downgrading of France's credit rating in mid-January would drive up the government's borrowing costs. But so far there has been no evidence of this.

Banks flush with cheap credit from the European Central Bank have snapped up medium-term French debt at several bond sales since the downgrade.

Meanwhile, Germany's borrowing costs remained at near record-low levels. The yield on 10-year German bonds came in at 1.846 percent.