France sold 8.46 billion euros ($11.05 billion) of notes, with borrowing costs falling in yet another sign the European Central Bank’s increased lending is spurring investor demand for the region’s debt.
The notes sold were at the top end of the 8.5 billion euros targeted by Agence France Tresor, the country’s debt-management body. Earlier today, Spain sold 3 billion euros of bonds maturing in 2015, 2016 and 2018, the Bank of Spain said, less than its maximum target for the auction of 3.5 billion euros.
France sold 3.26 billion euros of benchmark five-year debt at an average yield of 1.78 percent. The borrowing cost for the 1.75 percent note maturing in February 2017 was less than the average yield of 1.93 percent on Feb. 16. France also sold two and four-year debt.
The ECB’s second Long Term Refinancing Operation, under which its three-year lending reached 1.02 trillion euros in late February, has been critical to easing bond market stress by giving banks the means to invest in the region’s sovereign debt.
In the second such operation last month, 800 banks received a total of 529.5 billion euros, more than the 470 billion euros median forecast in a Bloomberg News survey and the 489 billion euros of the first tender in December.
In the auction today, France sold 2.106 billion euros of April 2014 notes at an average yield of 0.7 percent, lower than the 1.14 percent on Sept. 15. It sold 1.93 billion euros of October 2014 securities at a yield of 0.86 percent, below the 2.01 percent it paid on Jan. 20. France also auctioned 1.165 billion euros in February 2016 notes at an average yield of 1.4 percent compared with 2.17 percent on Nov. 17.
The country will also sell as much as 1.7 billion euros of inflation-linked bonds later today.
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