The government placed 5.5 billion euros in a benchmark five-year euro bond yesterday, the first sale of government paper since last week’s downgrade by Standard and Poor’s (S&P), as a high yield drew demand from investors. The bond, maturing in August 2014 with a 5.5 percent coupon, was priced at the equivalent of 325.10 basis points over the equivalent five-year German benchmark bond, maturing July 2014. S&P cut Greece’s rating by one step last week to A-, the lowest grade among the 16 nations using the euro and six levels below the highest, citing the country’s failure to stick to budget plans, boost revenue and reduce debt. The Greek economy will grow just 0.2 percent this year as the global slowdown hurts tourism and shipping, compared with an average 4 percent over the past five years, according to the European Commission. The fallout from the worldwide credit crisis is battering Europe’s economies, prompting ratings companies to reassess the risk to investors of holding the debt of some governments. S&P has lowered Spain’s rating one step to AA+ and warned Portugal that its AA- grade may be cut. The spread of 10-year Greek bonds over benchmark German Bunds hit an historic high for a eurozone member near 281 basis points yesterday. The Greek government has said it needs to borrow 42 billion euros in 2009 to service its debt and finance public expenditure.