France saw its borrowing costs fall on Wednesday in the first debt auction after President Francois Hollande's inauguration yesterday.
The Agence France Tresor raised EUR 7.996 billion from the sale of 2, 3, 4 and five years debt, close to the EUR 8 billion maximum target set for the sale.
The agency sold EUR 2.505 billion of 0.75 percent September 2014 of treasury notes or BTANs, at an average yield of 0.74 percent, down from 0.85 percent paid in the previous auction on April 19. The bid-to-cover ratio, which signals demand, rose to 2.97 from 2.29.
The country raised EUR 3.651 billion from the sale of its 1.75 percent February 2017 BTAN at an average yield of 1.72 percent, which was less than the 1.83 percent seen in the April auction. Demand was 2.04 times the offer, less than the 2.69 cover ratio in the previous sale.
The AFT also sold a total EUR 3.022 billion from the sale of longer term bonds or OATs, including some inflation-indexed securities.
After taking office on Tuesday, Hollande stuck to his call for a re-negotiation of the European fiscal compact that deals with budget discipline. He is seeking pro-growth reforms in the pact.
Hollande met with German Chancellor Angela Merkel in Berlin later on Tuesday. The two leaders, who differ in their views on solving the debt crisis, said their countries would work together for the benefit of Europe.
They also insisted that they wanted Greece to remain in the 17-member bloc that uses euro as its common currency and promised to help promote economic growth in the debt-stricken euro member as long as Athens honors previous agreements that require implementation of painful austerity measures in exchange for bailout loans.
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