Spain raised four billion euros in medium and long-term bonds Thursday a day after the IMF said the outlook for the nation remained bleak.
The Spanish treasury said the results had exceeded expectations, though the country paid a slightly higher rate for the 10-year bonds.
The Treasury had expected to raise 3.0-4.0 billion euros via the bond auctions, and demand outstripped supply by a ratio of two to one.
Spain and other eurozone states have enjoyed a substantial drop in borrowing costs since the European Central Bank vowed last September to help debt-struck members if necessary by buying an unlimited amount of their bonds albeit under strict conditions.
But in recent weeks Spain's borrowing costs have inched up again as some foreign investors refocus on risks over the Spanish economy such as debt strains faced by regional governments and balance sheet weaknesses at banks.
In this latest sale, the Treasury sold 1.517 billion euros of 10-year bonds at an average yield of 4.765 percent, up from 4.517 percent from the last similar auction held on June 6.
But for eight-year bonds the average yield was of 4.353 percent, selling 1.117 billion euros, down from 4.477 percent from the last similar auction held on April 4.
The Treasury also raised 1.381 billion euros in five-year bonds at an average yield of 3.592 percent, compared to 3.598 percent at the last comparable auction on April 4.
The International Monetary Fund said Wednesday that Spain's biting recession may end soon but the outlook is tough and Madrid must do more to battle the country's unacceptably high unemployment rate which is at a record 27 percent.
"While there are signs the economic contraction may end soon, the outlook remains difficult," the Washington-based Fund said in a report on the eurozone's fourth-largest economy