Italy Borrowing Costs on 2015 Debt Drop to March 2010 Level

Italy sold 5 billion euros ($6.6 billion) of securities today with rates on 2015 debt dropping to the lowest since March 2010 as investors remain confident the next government will maintain the economic reforms put in place by Prime Minister Mario Monti.

The Treasury in Rome today sold 3.5 billion euros of a 2015 note at 1.85 percent, down from the 2.5 percent paid Dec. 13 and the lowest since March 2010. The Treasury also sold a total of 1.5 billion euros of floating-rate securities maturing in June and Oct. 2017 respectively. Investors bid for 1.45 times the amount of the 2015 paper offered, up from 1.36 times Dec. 13.

Opinion polls show Pier Luigi Bersani, the center-left leader, probably will succeed Monti, though he may need Monti’s support to assemble a majority in both houses. That outcome is viewed by analysts as a guarantee that the former European commissioner’s economic reform path will continue.

“If the center-left falls short of a stable upper house majority, Bersani will likely turn to Monti’s centrists for support,” analysts at Eurasia Group in New York including Peter Ceretti said in a note yesterday. “The weaker the center-left’s majority, the stronger Monti’s bargaining position.”

Before it's here, it's on the Bloomberg Terminal.