France raises EUR9 bn in first bond issue

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France raised on Thursday EUR8.98 billion ($11.8 billion) in its first long-term bond issue of the year, with yields up strongly from the previous auction, the AFT public debt management agency said.

About EUR4.5 billion in bonds maturing in October 2020 were sold at an average yield of 3.36 percent compared to a yield of 2.87 percent in the previous auction on November 4, which represents an increase of 17 percent.

The yield was in line with that of 3.337 percent for French 10-year bonds on the secondary market on Wednesday, and was 49 basis points above what Germany paid to raise EUR3.916 billion euros in 10-year Bunds in its first auction of the year on Wednesday.

The spread with benchmark Bunds is a key indicator of investor confidence in France compared to its economically stronger neighbour Germany, and the latest spread is in line with the spread recently.

France also sold on Thursday EUR3.42 billion in bonds expiring in April 2026 at an average yield of 3.76 percent and 1.075 billion in bonds expiring in April 2029 at an average yield of 3.84 percent.

© 2011 AFP

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