Italian borrowing costs drop in bond sale
MILAN—Italy has raised (EURO)3.8 billion ($5.04 billion) in a bond sale that saw borrowing costs drop significantly as market pressure on the country continues to ease.
The interest rate for two-year bonds fell to 2.35 percent, down from 3 percent in the last such auction. Demand was 1.86 times the amount on offer.
For bonds expiring in Sept. 2019, Italy paid Tuesday a rate of 3.06 percent, while those expiring in September 2021 registered the borrowing rate was 3.45 percent. Demand for each was around twice the offer.
Italian borrowing costs have dropped since the European Central Bank pumped cash into the banking system and as investors welcomed reforms planned by Premier Mario Monti.
With public debt of 120 percent of GDP, Italy is considered to big to bail out.