Strong demand at $10 billion French debt auction

AP News
Posted: Sep 06, 2012 5:39 AM
Strong demand at $10 billion French debt auction

PARIS (AP) — France sold nearly €8 billion ($10 billion) in long-term debt at an auction that saw its borrowing costs for its 10-year bonds fall.

The yield, or interest rate, on the benchmark bond was 2.21 percent, down from 2.53 percent when it was last sold in July. There were no recent comparisons for the 5-year or 15-year bonds sold Thursday.

But demand was strong for all three. The sale reaped €7.98 billion, at the very top end of the Treasury's goal.

France's borrowing rates have been dropping in recent months. It even sold short-term bonds at negative interest rates earlier this year.

But economists say that because of its large debt and slow growth, France must quickly reduce its spending and jumpstart its economy, or face higher borrowing costs.