Bailed-out Portugal has managed to sell (EURO)2 billion ($2.5 billion) in short-term bonds at a lower cost than Spain - suggesting the much larger country's troubles are not spilling over to its neighbor.

Portugal's government sold (EURO)1.25 billion in 12-month paper at an interest rate of 3.5 percent, against 3.8 percent at a similar auction held in June. Investors bought (EURO)750 million of 18-month bonds at a rate of 2.3 percent compared to 2.7 percent a month ago.

The yields investors demanded Wednesday for the Portuguese notes were below those for Spanish 12-month and 18-month bonds sold a day earlier.

Filipe Silva, debt manager of Lisbon-based financial group Banco Carregosa, says buyers of Portuguese bonds "are ignoring to a certain degree what's happening in Spain."