Italian Borrowing Costs Rise From Record Low at Bill Auction

Italian borrowing costs rose at an auction of six-month bills today amid pessimism about a full recovery in the euro region’s economy despite the European Central Bank’s stimulus measures.

The Rome-based Treasury sold 7 billion euros ($8.9 billion) of 182-day bills at 0.232 percent, up from the record-low 0.136 percent for a similar security at the previous sale Aug. 27. Investors bid for 1.85 times the amount sold compared with 1.63 last month. Italy redeems 8.3 billion euros of bills on Sept. 30.

Even after cutting borrowing costs for banks to record lows and offering long-term loans, ECB President Mario Draghi is struggling to persuade them to take more ECB cash to finance lending to the real economy. In an offer of four-year loans last week, banks borrowed a less-than-estimated 82.6 billion euros.

The yield on Italian 10-year bonds fell 1 basis point to 2.35 percent at 11:11 a.m. Rome time.

Italy will sell up to 8.5 billion euros of debt on Sept. 29, including five and 10-year bonds as well as floating notes maturing in 2020.

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