France sees borrowing costs fall at bond auction

France's government has raised (euro) 7.8 billion ($9.7 billion) in an auction of long-term bonds that saw its key borrowing rate fall.

 

The bond sale came amid heightened fears that Spain's rocky finances could further damage the eurozone.

 

In France's largest bond issue Thursday, the treasury sold (euro) 3.5 billion in 10-year bonds. It paid an interest rate of 2.46 percent, down from 2.96 percent the last time it auctioned such bonds a month ago.

 

The overall sale was on the high end of government expectations of between (euro) 7 billion and (euro) 8 billion, and demand was strong, an indication of investor confidence. The treasury also sold bonds maturing in 2019, 2026 and 2060.

 

Critics of France's new Socialist government question whether it can bring down the country's high debts as promised.