Germany issues 10-year bonds at record low yield

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The yield on German government 10-year bonds fell below 2.0 percent for the first time in the latest auction of government bonds, the German central bank said Wednesday.

In a sign that investors are fleeing to safety with no end to the current eurozone debt crisis in sight, the yield on a new offering of German 10-year "Bunds" maturing in September 2021 fell to a record low of 1.8 percent, the Bundesbank said in a statement.

With inflation in the eurozone's biggest economy currently at an annual rate of 2.4 percent, that means investors will make a loss when buying the bonds.

Demand for the offering was strong, with investors bidding for a total 6.34 billion euros ($8.6 billion) in bonds while only 5.0 billion euros worth was on offer.

© 2011 AFP

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