Italy borrowing rates drop again in bond auction

AP News
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Posted: Aug 30, 2012 5:52 AM
Italy borrowing rates drop again in bond auction

ROME (AP) — Italy has paid lower rates to easily sell €6.5 billion ($8.15 billion) in treasury bonds, the third auction this week that saw the country's borrowing rates drop amid increased investor confidence in the country.

Italy's central bank said Thursday it sold five-year bonds at a 4.73 percent rate, compared with the 5.29 percent rate it paid at the last such auction in July. Ten-year bonds were sold at a 5.82 percent rate, down from 5.96 percent. Demand on the five-year bond was 1.46 times the amount on offer, while demand for the 10-year bond was 1.42 times the amount on offer.

Borrowing rates for Italy and Spain have dropped sharply in recent weeks amid expectations the European Central Bank will approve a plan to buy those countries' government bonds.