Germany sells 4.8 bln euros of Bunds, to poor demand

LONDON, Nov 24 (BestGrowthStock) – Germany sold 4.8 billion euros of
new 10-year bonds on Wednesday, with low yields failing to draw
enough bids to cover the amount on offer despite a marked pick
up in risk appetite.

The sale came as peripheral euro zone issuers came under
intensifying pressure, with contagion fears pushing Spanish and
Portuguese yield spreads over Bunds to new euro life time highs.

The German Bund sale, which carried a coupon of 2.5 percent
and priced with an average yield of 2.59 percent, attracted bids
of just 5.667 billion euros against a target amount of 6 billion
euros. For auction details click see [ID:nLDE6AN0SU]

The Bundesbank retained 20 percent of the issue, above the
year-to-date average of 17 percent, according to Credit Agricole
and the “tail” at 6 cents reflected poor bidding.

“This demonstrates the lack of demand for German paper at
current low yields, especially after the rally of the past two
days,” said the bank’s strategist Peter Chatwell.

“Buyers of Bunds at these levels are taking off their risk
trade, they are not investing long term in German debt.”

The bid/cover ratio of 1.2 was the lowest since February
2009, according to the bank.

Germany sells 4.8 bln euros of Bunds, to poor demand