MILAN Jan 11 (Reuters) - Italian three-year borrowing costs dipped under 2 percent at an auction on Friday, falling to the lowest level in nearly two years amid strong demand for the debt of weaker euro zone members from investors hunting for higher yields.
Investors snapped up 3.5 billion euros of a three-year BTP bond maturing on December 2015, securing a return of 1.85 percent.
The treasury paid 2.5 percent on the same bond at a similar sale one month ago.
While the yield fell to the lowest level since March 2010, it looked attractive to buyers compared with a return just above zero on the equivalent German Bund.
At the same time investors showed little concern for Italy's electoral campaign ahead of a crucial general election in late February.
Rome also sold 1.5 billion euros of two five-year floating rate CCTeu notes, issuing the top targeted amount of 5 billion euros.