Italy's 2-yr borrowing costs rise slightly ahead of vote

MILAN Mon Feb 25, 2013 5:23am EST

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MILAN Feb 25 (Reuters) - Italy's two-year borrowing costs rose slightly on Monday, showing investors were cautious few hours ahead of the results of a wide open general election.

The treasury sold 2.818 billion euros ($3.71 billion) of two-year zero-coupon bonds, just below a maximum planned amount of 3 billion euros. It paid a yield of 1.682 percent, up from 1.43 percent at a similar sale one month ago.

Demand was healthy and borrowing costs at auction came out below secondary market level of 1.80 percent.

Exit polls soon after 1400 GMT could spark an initial market reaction with a relief rally seen likely if preliminary results hint to a pro-reform centre-left government.

On Monday Italy offered also two inflation-linked BTPei bonds maturing September 2021 and September 2026 respectively.

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