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Germany Pays Record Low Yield For 2-year Debt

4/18/2012 6:46 AM ET

Germany's two-year borrowing costs fell to a record low in an auction on Wednesday in a sign of rising concerns over Spain.

The country sold EUR 4.206 billion of 0.25 percent March 2014 Federal Treasury Notes at 0.14 percent yield, Bundesbank said. The yield in the first sale in February was 0.25 percent. The previous low yield for the two-year debt was 0.17 percent in a sale in January.

The total bid amount was EUR 7.670 billion. The target set for the sale was EUR 5 billion. The government set aside EUR 794 million, which is 15.88 percent of the offered amount, for secondary market operations.

The bid-to-cover ratio, which indicates demand, was 1.8 in the latest auction, unchanged from the February sale.

Yields on the German debt have been falling significantly in recent weeks as worried investors flock to safe haven. There are increasing concerns over Spain's ability to tackle its problems.

With rising borrowing costs, it is expected that Spain would be forced to seek a bailout.

by RTT Staff Writer

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