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Contagion fears build as Italy’s forced to pay more
CONCERNS of contagion from Greece’s fiscal crisis were stoked yesterday by an Italian bond auction in which the sovereign was forced to pay far higher rates for cash than in previous sales.
The auction of 2021 Italian debt only met with lacklustre demand, attracting a bid-to-cover ratio of 1.334 times compared with 1.504 times previously.
That was part of €7.9bn (£7.07bn) worth of Italian debt put on auction yesterday.
The sale has added to growing concerns that Italy and Spain may no longer be immune to contagion from the debt crisis that prompted Greece, Ireland and Portugal to seek financial help.
Yields on Italian 10-year debt closed at 4.98 per cent yesterday.