MADRID -- Spain raised €3.5 billion ($4.3 billion) in an oversubscribed bond auction, a day after Moody's warned it may join others in downgrading the country's debt rating.

The average interest rate was 3.65%, up from 3.53% at the last such auction in May, and the sale was 1.7 times oversubscribed, the Treasury Department said Thursday.

The government had hoped to sell between €2.5 billion and €3.5 billion of the bonds.

A Treasury Department official said the oversubscription ratio showed the Moody's warning went "totally unnoticed."

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