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June 30, 2022

Italy raises EUR 7.5 bln in bond issue, rates record high

Italy’s borrowing rates shot up to a new high on Tuesday, breaking through the 7.0-per cent warning threshold at a bond sale closely watched by investors worried that the country may need a bailout, the Economic Times reports.

The rates on bonds with shorter maturities were higher than on longer maturities, an inversion of the normal rise of a yield curve. The Italian Treasury raised EUR 7.5 bln with bonds set to expire in 2014, 2020 and 2022, but fell short of the target of 8.0 bln euros. The yield on bonds maturing in 2014 shot up to 7.89 per cent from 4.93 per cent and rates on those expiring in 2022 rose to 7.56 per cent compared to 6.06 per cent at the last similar operation. Interest on bonds expiring in 2020 rose from 5.47 per cent to 7.28 per cent. The head of the International Monetary Fund (IMF), Christine Lagarde, said Monday that the fund had not received any request for help from Italy amid rumours of a bailout of up to EUR 600 bln for the ailing economy.

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