Yield falls as Italy sells 3-year bonds: reports

FRANKFURT (MarketWatch)
Italy on Friday sold 3.5 billion euros ($4.3 billion) of new three-year government bonds, producing a yield of 4.65%, down from 5.30% in a sale in June, news reports said
Borrowing costs were expected to decline after Italian bond yields pulled back from crisis levels following a European Union summit meeting in late June
The amount sold was at the top end of the government's range of 2.5 billion to 3.5 billion euros. Demand outstripped supply 1.73 times, reports said, up slightly from 1.59 in June
The sale comes after ratings firm Moody's downgraded Italy's credit rating two notches to Baa2 from A3 and left the rating on negative outlook
In the secondary market, the yield on Italy's 10-year government bond erased part of an earlier rise to trade at 5.97%, up 0.07 percentage point from Thursday