“Italy’s borrowing costs surged at the sale of 6.5 billion euros ($8.2 billion) of Treasury bills after the 100 billion-euro bailout of Spain’s banking system failed to stop contagion from the region’s debt crisis.
The Rome-based Treasury sold the one-year bills at 3.972 percent, 1.63 percentage points more than the 2.34 percent at the previous auction on May 11. Investors bid for 1.73 times the amount offered, down from 1.79 times last month.
The yield on Italy’s 10-year bond fell 4 basis points to 6.13 percent at 11:54 a.m. in Rome, pushing the difference with German bunds to 463 points. A bigger test for the Italian Treasury comes tomorrow when it sells as much as 4.5 billion euros of longer-maturity debt.”
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