Italy managed to place the maximum expected today of 7,500 million euros in bonds to twelve months at a yield lower than the previous comparable award in its first debt offering after the last European Council and the spending cuts announced 26,000 million euros by their government.
According to data released by the Bank of Italy, investors demanded an interest rate of 2.697%, representing a significant drop compared to the last auction of this type of debt held in mid June, Cundo yield was reached 3.972%.
Analysts said interest below 3% would be considered a good result for this issue, with which, moreover, the trend has been interrupted since late May by which Italy had been forced to pay more to finance in recent auctions.
Demand exceeded supply and stood at 11.595 million euros, with a coverage ratio of 1.55 times lower, however, than in the previous issue, when it was 1.77 times.
Today was the first date that Italy has faced in the debt markets from the European summit on 28 and 29 June in Brussels, where the euro zone leaders paved the way for direct recapitalization banking and facilitate the use of European funds to buy debt rescue of countries under pressure in the markets.
Pressure that Italy has charged in recent months by doubts aroused by the country’s financial solvency and the technocrat government of Prime Minister Mario Monti is to tackle measures to promote growth and clean up the public accounts.
The last of these measures has been approved by the Government of a new plan of spending cuts, especially in the field of Health and Public Administration, valued at 26,000 million euros until the end of 2014.
Monti himself acknowledged yesterday that the country is, difficult financial and economic situation, a “war path” whose end is not yet come.
Also, today’s broadcast came after the European Central Bank (ECB) lowered interest rates by a quarter point to 0.75%, the lowest level so far, and reduced the deposit facility by that pays the money, to 0%, meaning that institutions get nothing for putting your money at the ECB overnight.
These factors, according to some experts, may have led to interest from investors seeking short-term profitability.
After the auction, the risk premium Italian, which measures the spread between ten-year bond Italian and German at the same time, marked the 452 basis points, in line with the opening of the session.
The Italian ten-year bond yields in the secondary market stood at 5.78%.
The issue today is the first in a series of two, because tomorrow the Italian Treasury will be auctioned between 3,500 and 5,250 million euros in bonds at 3, 10 and 15.
While debt auctions scheduled for this July will be held unchanged, with a fresh batch later this month, the Ministry of Finance announced in recent days not to be held, however, the issue scheduled for 14 August.
The department explained his decision saying “the good performance of fiscal revenues, although some experts felt that could be due to a strategy linked to the fear of strong speculative scheduled for August.