April 29, 2013 / 9:26 AM / 6 years ago

Italy debt costs fall to lowest since Oct. 2010 after govt formed

MILAN, April 29 (Reuters) - Italy’s five- and 10-year borrowing costs fell to their lowest level since October 2010 at an auction on Monday as new Prime Minister Enrico Letta named a coalition government, ending two months of political stalemate.

The treasury sold all of its planned 3 billion euros ($3.9 billion) of 10-year bonds at 3.94 percent, well below the yield of 4.66 percent it paid at a similar sale one month ago.

Rome also issued all the 3 billion euros of five-year bonds it wanted to place, paying a return of 2.84 percent, down from 3.65 percent paid at an auction at the end of March.

Letta is expected to win the backing of his own centre-left Democratic Party and former prime minister Silvio Berlusconi’s centre-right People of Freedom party in a confidence vote due to take place at 3 p.m local time. (1300 GMT).

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