Italian yields fall sharply in €5 billion auction; Monti govt survives confidence vote

Italy easily raised €5 billion ($6.47 billion) in a pair of bond auctions on Thursday that saw a sharp drop in borrowing rates, a sign that investor confidence in the country is improving.The sale was the first test of market sentiment in the country’s handling of its debt since ratings agency Standard & Poor’s cut Italy’s credit rating by two notches on Jan. 13.

Italy paid an interest rate of 3.763 percent on €4.5 billion in two-year bonds, compared with 4.85 percent in a comparable auction in December. The borrowing cost for a new bond expiring in September 2014 was 3.2 percent.

UniCredit analysts said the sale was “positive” and an encouraging sign for upcoming auctions.

For more: Italian yields fall sharply in €5 billion auction; Monti govt survives confidence vote - The Washington Post