Italy's 10-yr debt costs leap to 4.83 pct but demand healthy

MILAN Wed Feb 27, 2013 5:25am EST

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MILAN Feb 27 (Reuters) - Italy's 10-year debt costs rose more than half a percentage point on Wedensday at the first longer-term auction since an inconclusive parliamentary election, although they remained below the psychologically important level of 5 percent.

The treasury sold the top planned amount 4 billion euros of a new 10-year bond, with a yield of 4.83 percent, the highest since October 2012. At the end of January, Rome had paid 4.17 percent to sell 10-year paper.

The bid-to-cover was good at 1.65, signalling healthy demand for Italian long-term debt.

Rome also issued 2.5 billion euros of a five-year bond, paying 3.59 percent, up from 2.94 percent one month ago.

The vote cast by Italians the weekend gave none of the political parties a parliamentary majority, raising the risk of protracted instability and a rekindling of the euro zone's debt crisis.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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