MILAN: Italy sold the top planned amount in bonds at auction on Friday, paying negative three-year yields for the first time ever after the European Central Bank widened its stimulus measures but indicated that further rate cuts were unlikely.
Italy raised 7.5 billion euros ($8 billion) selling three nominal bonds including a new seven-year issue maturing in March 2023.
The Treasury paid a negative 0.05 percent yield to sell a new tranche of an October 2018 three-year bond. It had last auctioned it a month ago paying 0.11 percent.
Until now only yields on short-term Italian bills had fallen below zero, meaning investors are ready to pay the Treasury to hold its debt.
The bid-to-cover strengthened slightly from last month to stand at 1.6 times.
The new seven-year bond was sold for 4 billion euros at a 0.79 percent yield, down from the 1.05 percent rate the Treasury paid a month ago on a similar maturity and the lowest level since March.
The sale was covered 1.3 times from nearly 1.5 times at the much smaller February auction.
Italy also sold a March 2032 15-year bond at 1.84 percent compared with 2.03 percent when this bond was last offered in mid-January.
It was the lowest 15-year auction yield since April. Bids totalled 1.5 times the amount sold.
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