Germany zero coupon bond sale attracts strong demand, record low yield
2012-05-23 16:50:59
An offering of a new line of Germany's zero coupon two-year bond drew strong demand on Wednesday and the country paid record low yield as investors looked for a safe haven amid rising speculation of Greece's exit from the euro area.
The country raised EUR 4.555 billion from the sale of its new June 2014 Federal Treasury Notes or Schatz, the Bundesbank said. The auction target was EUR 5 billion. The sale attracted bids totaling EUR 7.744 billion.
The yield on the zero interest debt was 0.07 percent, which was reportedly the lowest on record for similar securities. The bid-to-cover ratio, which reflects demand, was 1.7.
Previously, Germany sold 0.25 percent March 2014 Treasury Notes at 0.14 percent yield on April 18. Demand was 1.8 times the offer.
The triple-A rated Eurozone member also sold 0.10 percent inflation-linked bonds or linker, on Wednesday.
The country placed EUR 1.291 billion of the April 2023 bond at a negative yield of 0.24 percent. In a March 21 auction, the yield was 0.15 percent.
Investors bid 1.3 times the offer compared to 1.6 in the March sale. The auction drew bids totaling EUR 2.218 billion against the target of EUR 1.5 billion.