Italy two-year debt costs fall to lowest since May

MILAN, July 26 Fri Jul 26, 2013 5:19am EDT

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MILAN, July 26 (Reuters) - Italy's two-year borrowing costs fell at an auction on Friday as investors braced for hefty debt redemptions next week in a thin market.

The treasury sold 3 billion euros ($3.97 billion) of zero-coupon bonds maturing on June 30, 2015, paying a yield of 1.86 percent, the lowest since May.

At a similar auction one month ago the treasury had to pay a return of 2.40 percent to lure investors that were fretting about a withdrawal of the U.S. monetary stimulus.

The treasury placed the top planned amount in the sale, at which it did not offer inflation-linked BTPei bonds.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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