Yields on French treasury bills eased marginally today in the first test of investor appetite for the country's debt since it was stripped of its coveted triple-A credit rating.

The Agence France Tresor (AFT) debt management agency sold €8.6 billion of short-term bills, at the top end of a target range of €7.4 billion to €8.7 billion indicated ahead of the auction.

The auction drew firm demand for French debt in the first issue since ratings agency Standard and Poor's downgraded France's long-term AAA sovereign rating by one notch to AA+ with a negative outlook. It reaffirmed its short-term rating at A-1+.

AFT sold €4.5 billion of the 12-week BTF notes at a yield of 0.165 per cent, barely changed from the 0.166 per cent at the last auction on January 9th. Investors put in nearly twice as many bids as there were bonds on offer, giving a so-called bid-to-cover ratio of 1.9 per cent.

It also sold €2.2 billion of 25-week BTFs at a yield of 0.281 per cent, compared with 0.286 perc ent in the last auction. The issue drew a bid-to-cover ratio of 2.053 per cent.

In the last line, AFT sold €1.9 billion of 51-week BTFs at 0.406 per cent, down from 0.454 per cent in the last auction and with a bid-to-cover ratio of 2.108 per cent.

Reuters