Investors pay to lend Germany money for two years
2012-07-18 17:44:34
Investors paid to lend Germany money for two years for the first time at an auction on Wednesday, the country's central bank said, as they flocked to the safe haven of Europe's top economy.
The yield or rate on the auction of two-year debt was a record low of minus 0.06 percent, the Bundesbank, which organised the auction, said in a statement.
A negative yield means that investors are actually paying to lend Germany money.
"In view of the ongoing market tensions, investors are continuing to look for quality and security. That was decisive factor in the success of this issue," said a spokesman for the Federal Finance Agency, which manages Germany's debt.
The Bundesbank said it received 8.354 billion euros ($10.3 billion) in bids for the two-year bills, known as "Schatz".
Some 4.173 billion euros were allotted, meaning the so-called cover ratio was 2.0, with 827 million euros set aside for market-tending purposes, the statement said.
At its last auction of two-year bonds in June, Germany paid an average rate of plus 0.10 percent.