Italy pays slightly higher yield on 12-month bonds

August 13, 2012 - 7:36 AM

MILAN (AP) —

The Italian Treasury has paid slightly higher interest rates to borrow money for 12 months, a sign of ongoing unease over the country's public finances.

Italy on Monday paid 2.76 percent to attract investors to the first bond auction this month, compared with 2.69 percent in July. The sale easily raised €8 billion ($9.8 billion), with demand 1.69 times the offer, compared with 1.55 percent last month.

Italy's borrowing costs have come under pressure due to investor concern about whether eurozone leaders can safeguard the common currency, and whether Italy can continue servicing its enormous public debt, which is equal to 123 percent of GDP.

The Bank of Italy said the debt reached €1.972 trillion in June, up from €1.966 trillion the previous month.