Italy Sells Maximum EU11 Billion of Bills

11 billion euros ($14.5 billion) of Treasury bills today, meeting its target, and borrowing costs plunged from the previous sale.
The Rome-based Treasury sold 8 billion euros of 182-day bills at 1.969 percent, the lowest since May and down from 3.251 percent at the last auction of similar-maturity securities on Dec. 28.

Investors bid for 1.35 times the amount offered, down from 1.69 times last month. The Treasury also sold 3 billion euros of 331-day bills at a rate of 2.214 percent.

“Bond auctions in Italy are no longer nerve-wracking affairs,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said by e-mail.

“The risks of a sharp sell- off in Italy’s debt market have fallen significantly of late.”

Italy has benefited from the European Central Bank’s efforts to fight the spread of the debt crisis by shoring up banks and propping up demand for government bonds.

The Frankfurt-based ECB loaned euro-region banks a record 489 billion euros for three years on Dec. 21 to avert a credit crunch and has bought 217 billion euros of government bonds since beginning the purchases in May.

From: Bloomberg