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Italian premier Mario Monti: The cost of borrowing for Italy has fallen dramatically in a month. Jin Lee/AP
Downgrade
Interest rates plunge as Italy raises €6 billion in new auction
What downgrade? Italy flogs billions in 12-year bonds with interest rates falling dramatically on a similar bond last month.
ITALY HAS SEEN its cost of borrowing fall dramatically this morning, as it successfully raised €6 billion in a new bond auction.
The country’s treasury this morning sold €4 billion in bonds maturing in November 2014, with an average interest rate of 3.41 per cent.
That yield is down significantly on the 4.83 per cent commanded when similar bonds were sold only a month ago.
Alongside the benchmark loans, Italy also raised €2 billion in bonds due in 2015 and 2017, at yields of 3.77 and 4.26 per cent respectively.
The lower borrowing costs come despite the downgrade of Italian bonds by Moody’s, which cut Italy’s rating by one notch last night.
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