MADRID (AP) — Spain's borrowing costs rose significantly yesterday in its first debt auction since its credit rating was downgraded last week by Standard & Poor's amid concerns it might be hit by a Greek-style debt crisis.

The Spanish Treasury said it issued 2.345 billion euros in five-year bonds at an interest rate of 3.58 percent, up from 2.84 percent in the last auction in March.

It said yesterday's auction was oversubscribed, with the Treasury receiving 5.522 billion in bids.

The Treasury said its target this time was to issue between 2 billion and 3 billion in five-year bonds. That is well below the 4.5 billion issued in March.

A Finance Ministry official downplayed the government's decision to scale back its debt issuance and played up the fact that today's auction was oversubscribed, saying it showed investors still have a strong appetite for Spanish debt despite market turbulence.

S&P said last week it had lowered Spain's credit rating by one notch to AA because of concerns that low economic growth for several years to come would make it hard for the government to meet its goal of slashing a deficit that totalled 11.2 percent of GDP last year.