“Italy was forced to pay 1 percentage point more than a month ago to sell zero-coupon bonds in the first auction since Prime Minister Mario Monti’s government moved back its balanced-budget target.
The Treasury sold 2.5 billion euros ($3.3 billion) of the zero-coupon 2014 debt to yield 3.355 percent, up from 2.352 percent at the previous auction on March 27. Investors bid for 1.80 times the amount offered, down from 1.86 times last month. The Rome-based Treasury also sold 943 million euros of inflation-linked bonds due in 2017 and 2019 to yield 3.88 percent and 4.32 percent, respectively. The auction’s maximum target was 3.5 billion euros.
Investor confidence in the debt of Europe’s so-called peripheral countries has eroded since Spain’s announcement on March 2 it won’t meet its deficit target this year, leading to six weeks of declines of Italian bonds. Monti last week delayed its goal to erase the deficit by one year to 2014, joining Spain in missing fiscal targets amid a worsening recession…”
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