That is the message behind the widening spreads on Italian debt

2022-04-25 0 By

Debt sales by the most creditworthy companies in Europe were 26 percent lower than the same period in 2021, at 27 billion euros, well below the average of the past four years, according to Bloomberg data.Companies are facing higher borrowing costs as the era of easy monetary policy comes to an end.Italian bond yields rose sharply last week, widening spreads over German bunds, after European Central Bank President Christine Lagarde refused to rule out an interest rate rise this year.Higher interest rates could put renewed pressure on Italy’s public debt, which is already 154% of GDP.A Bloomberg report published Friday warned that if Italy’s borrowing costs returned to 2013 levels, it could force its debt-to-GROSS domestic product ratio to increase by 20 percent.Thanks to years of ultra-low yields, Italy’s debt structure has diversified, giving the country more scope to counter market tensions.Since the euro-zone debt crisis, the average maturity of Italian government bonds has returned to more than seven years, according to Balboni, an analyst at HSBC.Now watch the Edge Lab to keep up with the latest financial news from around the world.For more exciting content, come to the Edge Lab