Italy easily covers bond auction

[January 11, 2011]  MILAN (AP) -- The Italian Treasury had no problem selling euro7 billion in 12-month bonds offered on Tuesday.

But yields rose modestly to a two-year high of 2.067 percent from 2.014 percent in December.

"The auction was well received and confirmed once again investors' interest for Italian paper," Unicredit bond analyst Chiara Cremonesi said in a note.

Investors bid for a total of euro11.4 billion, 1.6 times the offer. In December, demand was twice the euro4 billion offer.

Italy did not sell three-month bonds as it had no short-term cash needs.

Italy has seen its yields rise during the European debt crisis that has forced bailouts of Irish and Greek debt. However, it continues to be considered the safest bet among the so-called periphery nations.

[Associated Press]

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