International investors are growing increasingly worried that the financial crisis in Europe is getting worse.
Bond prices in Spain are hitting new lows, driving interest rates to record highs, with yields near 7 percent.
The news comes after Moody's Investor Service downgraded Spain's credit rating from from A3 to Baa3, just one notch above junk status.
"That is quite an aggressive move from the rating agency, especially taking [into] account the negative rating watch which will be reviewed in the next three months," MarketWatch quoted ING rate strategist Alessandro Giansanti.
Moody's explained the downgrade was a response to the eurozone's $125 billion bailout of Spain, something they believe will increase the nation's debt burden significantly.
Meanwhile, analysts are also worried that the debt crisis could spread to other major countries, like Italy.