Bloomberg News

Italy Sells Zero Coupon Bonds at Lowest Yield in Two Years

November 27, 2012

Italy sold 3.5 billion euros ($4.5 billion) of zero-coupon bonds, the maximum set for the auction, at the lowest yield on a similar bond since October 2010.

The Rome-based Treasury sold the 2014 zero-coupon bonds to yield 1.923 percent, less than the 2.397 percent at the last auction of the same securities on Oct. 26. Investors bid for 1.5 times the amount offered, compared with 1.65 last month.

Italy also sold 253 million euros of 3.1 percent inflation- linked 2026 bonds and 747 million euros of 2.35 percent inflation-linked bonds due in 2019. The 2026 bond was priced to yield 3.49 percent versus 3.75 percent on Oct. 26. The 2019 bond was sold at a yield of 2.53 percent.

Italian bond yields have declined since European Central Bank President Mario Draghi vowed in July to do what’s needed to preserve the euro and followed in September by announcing a bond-buying program for countries facing financing stress.

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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