EFSF yields go negative as investors pay to lend to bailout fund

Investors are now paying to hold European Financial Stability Facility debt, after six-month t-bills sold at a negative yield at auction for the first time ever.

Germany's central bank, which managed the issue, said the rescue fund placed €1.488bn of 6-month bills at a yield of -0.0113%. The bailout fund has continued to attract solid demand with the bond markets pressuring Spain and Italy, pushing their borrowing costs up to around the 7% level for 10-year paper. The 7% yield is seen as the point at which borrowing becomes unsustainable over the long term - Greece, Ireland, and Portugal crossed the 7% threshold shortly before they each had to seek an international bailout. Two-year yields on debt issued by Germany, Switzerland, the Netherl...