MADRID (Bloomberg) — Spain's borrowing costs climbed at a sale of 10-year bonds amid speculation that the euro-region's debt crisis won't be solved by a $1 trillion rescue package.

The Treasury said it paid an average yield of 4.045 percent, 0.19 percentage points more than at a March auction for similar-maturity bonds and the highest rate since April 2009. The government sold 3.52 billion euros ($4.36 billion) of the securities, exceeding the 3.5 billion-euro upper limit of its target.

Demand was "overall better than most expected," said Marc Ostwald, a fixed-income strategist at Monument Securities Ltd. in London. Still, the yield and spread "underscore that the price for Spain to service its debt is rising sharply."

The bonds fell more than similar securities of Italy, Greece or Portugal as Spanish Prime Minister Jose Luis Rodriguez Zapatero prepares to lead a meeting of his cabinet today that aims to approve as much as 15 billion euros of spending cuts announced in the Spanish Parliament last week.

The government is seeking to reduce the euro region's third-largest budget deficit to within 3 percent of economic output in 2013 from last year's 11.2 percent ratio.

Spain's 10-year security fell today, raising its yield to 4.12 percent, up 0.8 percentage point. The 10-year bonds of Italy and Portugal climbed 0.06 percentage point and Greece was little changed as of 2:21 p.m. Madrid time.

While the extra yield investors demand to hold Spanish 10- year debt instead of benchmark German bunds rose 0.09 percentage point to 1.35 percentage point, it's still lower than the 1.64 percentage points reached on May 7, the most since the euro's introduction in 1999.

"This is exactly what the eurozone debt market needs — confidence in the higher-yielding markets — and these are the first steps to reopening the secondary market in peripheral debt," said Peter Chatwell, an interest-rates strategist at Credit Agricole Corporate and Investment Bank in London.