Italy paid lower rates on five-year bonds in an auction that raised €6.185 billion today, despite recent downgrades of its sovereign debt by all three top ratings agencies.
The rate on the €3.5 billion in five-year bonds sold fell to 5.32% from 5.6% in the last similar operation, the Bank of Italy said.
The Treasury also auctioned €2.685 billion due in 2018, 2021 and 2025. The yield on bonds maturing in 2018 rose slightly to 5.62% compared to 5.59% on September 13, while rates on bonds maturing in 2021 remained stable at 5.77%.
Italy sold bonds due in 2025 at a much higher rate of 6.34% compared to 4.26% previously but the last similar operation dates to August 2010.
The Treasury had hoped to issue between €4-6.5 billion and almost exceeded its target thanks to high demand totalling €9.22 billion.
The bond sale coincided with a speech in parliament by beleaguered Prime Minister Silvio Berlusconi in which he rejected calls for his resignation and warned that political instability could inflame the country's economic difficulties. The government faces a key confidence vote tomorrow.
Italy has been plagued by market troubles for the past few months as investors question the ruling coalition's ability to reduce debt, boost growth and balance the country's budget by 2013.
