MILAN, April 27 (Reuters) – Italian 10-year borrowing costs
climbed to 5.84 percent at a key auction on Friday, 60 basis
points above a comparable bond sale in March, after a ratings
downgrade of Spain overnight added to markets’ concerns about
the debt of weaker euro zone countries.
Italy sold 5.95 billion euros of bonds, near the top of a
planned issue range of between 3.75 billion and 6.25 billion
euros.
Analysts said the Treasury had widened the range size and
lowered its bottom end to hedge against risks of weak demand at
the sale in the face of highly volatile euro zone bond markets.
Italy offered new tranches of its May 2017 and September
2022 bonds. It also sold two lines maturing in April 2016 and
February 2019 which it no longer issues on a regular basis.
In March, when it last placed the September 2022 10-year
bond, it paid 5.24 percent. Friday’s sale was covered 1.48
times, slightly down from 1.65 times a month ago.
The auction yield on the May 2017 five-year bond rose on
Friday to 4.86 percent from 4.18 percent in March. The
bid-to-cover fell to 1.34 times from 1.65.
Five- and 10-year auction yields are now at their highest
since January. Italian bond yields have erased a fall recorded
in February and March thanks to cheap ECB funds.
Italy also sold around 1 billion euros of the two-off-run
bonds, drawing bids for around 2.5 times that amount.
