Italy raises $11.8 billion at much lower rate

December 28, 2011 - 6:45 AM

ROME (AP) — Italy says it has raised euro9 billion ($11.8 billion) in an auction of six-month bills and the rate it had to pay fell sharply, a sign that market jitters have eased.

The Bank of Italy said Wednesday the average yield on the offering was 3.251 percent, half the 6.504 percent rate it had to pay at the equivalent auction last month.

Italy is the eurozone's third-largest economy and is considered too big to save under the eurozone's current bailout facilities. Markets have grown fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around euro1.9 trillion ($2.5 trillion).

The market responded positively, with Italian shares up sharply and the yield on the country's ten-year bond back down at 6.74 percent.