France raises $11.6 billion in bond auctions
PARIS – France raised €9 billion ($11.6 billion) in a successful pair of bond auctions Wednesday that also saw some of its long-term borrowing costs move up.
Borrowing costs, as measured by yields or interest rates, for a slew of bonds with maturities between two and five years dropped, an indication investors consider France a safe bet. On the day's largest issue, a 5-year bond, the yield was 1.72 percent compared to 1.83 percent when it was last sold in April.
But the yields on inflation-linked bonds with maturities between 10 and 15 years rose. Still, demand for those bonds was very strong, another indication of investor confidence. For one, more than four times the number of investors bid than could be served.
France has occasionally seen its borrowing costs rise amid concerns over its ability to pay down its massive debt and rein in spending.
Wednesday's auction was the first since President Francois Hollande took power. Some worry that the Socialist will scare off investors with his plans to restart growth partially through spending. Others expect him to be more moderate, and he has promised to offset any new expenditure.