There was strong demand for Spanish bonds at an auction on Thursday, which was seen as a key test of the country’s ability to raise funds, but it had to pay a higher interest rate.
The rate on the 10-year bonds was 6.044%, up from the 5.743% paid when bonds were last sold in April.
Spain sold 2.1bn euros ($2.6bn; £1.7bn) in medium and long-term bonds.
It comes as European authorities are said to be working on a way to help Spain’s troubled banking sector.
UK Chancellor George Osborne said: “I know they are working very hard on an imminent solution.”
“I am optimistic that people are working hard on a solution, and a solution, I think, is coming,” he told the BBC.
Borrowing costs had not been as high as feared due to these efforts in Brussels to try to find a way to help Spain, analysts suggested.
Spain remains the focus of international concerns. In other developments:
- The head of China’s sovereign wealth fund, which invests China’s huge reserves around the world, said it was scaling back European investments due to the risk of a eurozone break-up
- UK Prime Minister David Cameron met German Chancellor Angela Merkel in Berlin
- Mrs Merkel called for “more Europe”, saying: “we need a political union first and foremost”
- Mr Cameron urged immediate action, calling for measures to calm nervous markets
- Cyprus, which is edging closer to asking for international help, moved to protect its UK savers by bringing them under the government-backed UK protection scheme
