German debt auction uncovered due to weak demand

AP News
Posted: Sep 26, 2012 7:27 AM
German debt auction uncovered due to weak demand

BERLIN (AP) — Germany's debt agency says an auction of the country's benchmark 10-year bonds did not receive sufficient bids due to a "very volatile market environment" and as investors balked at the record-low yields.

The agency stressed Wednesday "there is no danger for the financing of the federal budget."

Germany's central bank says the auction of €5 billion ($6.5 billion) only received bids worth €4 billion. The debt agency €3.2 billion in bonds at an average yield of 1.52 percent. It will keep the remaining €1.8 billion for sale later on secondary markets.

The debt of Germany is viewed as a safe haven amid the eurozone's debt crisis. Its popularity, however, has caused the yield to drop sharply, making it less attractive for traders seeking not just safe investments but good returns.