ECONOMY

Borrowing rates down for Greece, Spain and Italy, despite downgrade

Italy, Spain and even Greece managed to raise fresh funds at lower borrowing rates Tuesday in spite of Moody’s sovereign debt downgrades and Athens’s battle to avert bankruptcy.

Italy and Spain, the eurozone’s third- and fourth-biggest economies, lured strong investor interest in defiance of the New York-based credit rating agency, which axed their ratings.

Even Greece, forced to accept tough austerity measures in return for an international bailout that staves off financial collapse, was able to trim costs when raising short-term debt on the market.

Investors seem to have had their pockets filled with cash since the European Central Bank in December extended nearly half a trillion euros in cheap three-year loans to eurozone banks.

They clamoured to lend money to all three countries and shrugged off Moody’s downgrades and warnings, which nevertheless irked several governments in the region.

Italy raised 6.0 billion euros ($7.9 billion) in an auction of two-, three- and five-year bonds; Spain sold 12- and 18-month bonds for 5.446 billion euros; and Greece picked up 1.3 billion euros in three-month bills.

All three managed to bring down their borrowing costs. [AFP]