German bond issue becomes a success

The Bundesbank stands in Frankfurt, Germany, in this file photo. Germany successfully placed its first bond issue of 2011 on Jan. 4, 2010. Bloomberg photo

Germany successfully placed its first bond issue of 2011, the central bank said on Wednesday, reaffirming its safe haven status after several operations fell short late last year.
The Bundesbank said it took in 3.916 billion euros ($5.17 billion) in exchange for benchmark 10-year Bunds at an average rate or yield of 2.87 percent after receiving bids worth a total of 6.29 billion euros.
Late last year, three German issues of various maturities were undersubscribed amid heightened tension on sovereign debt markets owing to problems in Ireland.
Investors are also wary of debt issued by Belgium and Portugal, and had begun to worry that Germany might have to stump up more cash to help bail out eurozone countries with weak finances.
In Paris meanwhile, HSBC said the eurozone’s first bond issuance to fund the bailout of Ireland attracted demand of nearly four times the offer, with 19 billion euros bid for 5 billion euros worth of bonds.
In a related note, Portugal successfully raised 500 million euros in its first debt auction of the year, attracting solid demand for its short-term treasury bills, but was forced to offer investors sharply increased returns.
The yield, or return on investment for investors, reached a new record of 3.686 percent for the six-month treasury bills, against 2.045 percent in the previous auction, according to data from Portugal's IGCP state debt management agency.
Demand outnumbered the offer by 2.6 times, up from 2.4 times in the previous auction.