ULTRA-DOOM!!! Italy's 10 year bond rate breaches 7%

[russell]

It's not like the whole debt pile just became 7.4% FFS.

If Italy issue new 10 year bonds to borrow money they will have to pay a coupon rate of 7.4%.

[OwlHoot]

Just hit 9%.

Dominos now offering 2 for 1 and a free bottle of coke!

Crikey - Sounds like the balloon's really going up now.

You can't claim we're not living in interesting times.

[russell]

Crikey - Sounds like the balloon's really going up now.

You can't claim we're not living in interesting times.

No its at 7.4, MF got mixed up.

[MarillionFan]

No its at 7.4, MF got mixed up.

It was a fricking joke about Domino's you dull sockie.

I haven't even looked at the bond rate.

Jesus.

[russell]

It was a fricking joke about Domino's you dull sockie.

I haven't even looked at the bond rate.

Jesus.

[Freamon]

Yesterday the consensus was that Italy would be screwed if yields reach 7%... which they have done today.

"With Italian yields now at 7.4% (at 11am), Italy will need a bailout if prices were to stay even roughly were they are."... until when?

But is there a critical date which will crystalise the problem, e.g. a rollover date on debt repayments or something like that?

Italy's sovereign debt has a fairly short maturity profile - they have to roll over 310 bn during 2012.

[centurian]

Italy's sovereign debt has a fairly short maturity profile - they have to roll over 310 bn during 2012.

And given a spread of 4% compared to what it was - that means an extra 12Bn interest per year alone - and that's just for the debt that has to be rolled over in the next year.

For comparison purposes, raising VAT by 2.5% in the UK is expected to generate about 12Bn.

[BrilloPad]

Italy's sovereign debt has a fairly short maturity profile - they have to roll over 310 bn during 2012.

But isn't alot of it held by (Italian) private individuals rather than banks? Will they stay loyal?

[Freamon]

But isn't alot of it held by (Italian) private individuals rather than banks? Will they stay loyal?

Lots of Italians have already started moving their savings abroad.