MADRID (AP) — The yield on Spanish 10-year bonds shot up to a record 6.86 percent after a credit ratings agency downgraded the country's debt rating to just one notch above junk status.
The interest rate demanded by investors rose 15 basis points after trading started Wednesday.
Moody's downgraded Spain's sovereign debt from A3 to Baa3 Tuesday evening, saying that up to €100 billion ($125 billion) bank bailout announced last weekend by euro zone leaders for Spain's troubled financial sector will add to the government's debt burden.
The bailout was meant to shore up the banking system and calm Europe's debt crisis. But investors do not seem reassured and Spanish bond yields — a measure of investor jitters — have risen all week.