German Bunds Decline After ECB’s Three-Year Loans Exceed Analyst Estimates

German 10-year bunds extended a decline the European Central Bank allotted 529.5 billion euros ($713 billion) in its second round of three-year loans to banks, exceeding analyst estimates.

Italian and Spanish two-year notes held an advance. European banks were forecast to tap the ECB for 470 billion euros in the longer-term refinancing operation, according to the median estimate in a Bloomberg News survey of 28 economists. The amount compares with 489 billion euros taken at the first offering of such loans in December.

German 10-year bond yields rose four basis points, or 0.04 percentage point, to 1.84 percent at 10:32 a.m. London time. The 2 percent security due January 2022 fell 0.39 or 3.90 euros per 1,000-euro face-amount, to 101.385.

The rate on two-year Italian notes fell 22 basis points to 2.22 percent and yields on Spanish securities of similar maturity dropped eight basis points to 2.36 percent.

Italy’s government note yields have tumbled about 4 percentage points since the ECB announced its plan to offer unlimited loans for three years on Dec. 8.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.