France bond issue oversubscribed: treasury

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France raised 8.201 billion euros (10.7 billion dollars) at an oversubscribed bond auction on Wednesday that carried lower interest rates than at a previous sale, the treasury agency ATF reported.

The transaction came in the midst of a eurozone debt crisis in which borrowing costs for some of the bloc's weakest members have risen sharply, signalling investor unease with the state of their public finances.

Tension has risen sharply in recent days because eurozone finance ministers have said that investors buying bonds after 2013 may have to share in the costs of bailing out a country

Even Germany, the eurozone's biggest economy, has felt pressure, with a bond issue on Wednesday undersubscribed.

The French auction on Wednesday was for short-term loans of up to 50 weeks.

French officials have vigorously denied that France, despite its public deficit, is under threat in the current turmoil, insisting it has encountered no difficulty raising money on the bond market.

At Wednesday's auction demand for French debt was two or three times the amount sought.

Treasury bonds coming due in 13 weeks carried a yield of 0.578 percent, down from 0.652 percent on November 22. Bonds with 24-week maturity carried a yield of 0.691 percent, down from 0.752 percent, while those with a due date 50 weeks from now carried a yield of 0.818 percent against 0.896 percent on November 22.

© 2010 AFP

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