Bloomberg News

Italy Sells EU8.5 Billion of Treasury Bills as Rates Rise

May 29, 2012

A bigger test for the Italian treasury comes tomorrow when Italy sell as much as 6.25 billion euros of longer-maturity debt. Photographer: Alessia Pierdomenico/Bloomberg

A bigger test for the Italian treasury comes tomorrow when Italy sell as much as 6.25 billion euros of longer-maturity debt. Photographer: Alessia Pierdomenico/Bloomberg

Italy sold 8.5 billion euros ($10.7 billion) of Treasury bills, meeting its target as rates rose from the previous auction amid concern that Greece may leave the euro region.

The Rome-based Treasury sold the 183-day bills at 2.104 percent, up from 1.772 percent at the last sale of similar- maturity debt on April 26. Investors bid for 1.61 times the amount offered, down from 1.71 times last month.

The yield on Italy’s 10-year bond was 5.704 percent at 11:08 a.m. in Rome, pushing the difference with German bunds to 434 basis points. A bigger test for the Italian treasury comes tomorrow when Italy sell as much as 6.25 billion euros of longer-maturity debt.

Europe’s debt crisis intensified this month after Greek elections pushed a political party opposed to the nation’s international bailout into second place, raising the specter of Greece leaving the 17-nation euro region. Greece will hold a second round of elections on June 17.

While European leaders at a summit last week remained divided on how to stop contagion from the debt crisis, Spain is also adding to concerns. The country, which nationalized its third-largest lender this month, is trying to shore up its banking system and its cash-strapped regions even as its own 10- year bond yields approach the 7 percent level that prompted Greece, Ireland and Portugal to seek bailouts.

To contact the reporter on this story: Chiara Vasarri in Rome at cvasarri@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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