MILAN: Italy’s borrowing costs rose at auction on Monday after the European Central Bank opened the door to a gradual phasing out of its extraordinary stimulus measures last week. Italy sold 9 billion euros ($9.6 billion) over four bonds, at the top of its planned issue range. It sold an October 2019 three-year bond at a gross 0.37 percent yield, up from 0.25 percent when it last sold it a month ago and the highest auction yield for this maturity since March 2014. The bid-to-cover fell to nearly 1.4 times from nearly 1.5 times then. A new seven-year bond fetched an average 1.90 percent yield, up from 1.59 percent Italy paid in mid-February on the previous seven-year benchmark due in October 2023 and a high since July 2014. The new bond matures in May 2024. The 3.5 billion euro sale was covered 1.26 times.
The Treasury also sold a new tranche of a Sept. 2033 15-year bond it had first launched in January via a syndicated issue. The bond fetched a 2.87 percent yield at auction compared with 2.53 percent in January — a high since November 2014. The bid-to-cover stood at 1.6 times. The Treasury sold also a 30-year bond due in September 2046 at 3.42 percent.
