MILAN, Nov 29 (Reuters) - Italy paid record yields of nearly 8 percent to sell three-year paper on Tuesday, a level seen driving its debt burden out of control if sustained over time.
The yield on a new three-year BTP soared to euro lifetime high of 7.89 percent at the closely watched auction which allowed Rome to raise 7.5 billion euros.
The amount was close to the top of a targeted range of between 5 billion and 8 billion euros.
The new Nov. 2014 issue carries a 6 percent coupon, the highest for this maturity from 1997.
Only a month ago, Italy had paid a 4.93 yield to sell three-year paper.
The yield on a 10-year BTP bond due in March 2022 rose to 7.56 percent, marking a new euro lifetime high, from 6.06 percent at the end of October.
Italy also sold an off-the-run Sept. 2020 BTP bond.