Italy's borrowing costs surged at a sale of its one-year treasury bills on Wednesday after a EUR 100 billion Spanish bank rescue failed to calm concerns that Rome may be the next to seek a bailout.
The Italian Treasury raised the targeted EUR 6.5 billion from the sale of its 12-month bills.
The average yield on the 1-year paper rose to 3.972 percent from 2.34 percent in the previous sale on May 11.
The bid-to-cover ratio, which indicates demand, meanwhile fell to 1.73 from 1.79.
Italy is set to face a tougher challenge on Thursday, when it plans to sell as much as EUR 4.5 billion of its longer term debt, including 3-year bonds.
by RTT Staff Writer
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