September 26, 2012 / 10:08 AM / 5 years ago

German debt agency: uncovered auction shows market volatility

BERLIN (Reuters) - Germany’s debt agency said on Wednesday a technically uncovered auction of 10-year German debt reflected a very volatile market environment but said there was no danger for budgetary funding.

Germany sold 3.19 billion euros of its benchmark bond earlier on Wednesday but attracted bids worth less than the amount on offer as the record low coupon deterred investors. The country, which usually retains 20 percent of debt for sale on secondary markets, retained 36 percent this time around.

“The data shows a very volatile market environment, where investors are reacting by strongly holding back on purchases,” the debt agency said in a statement after the auction.

“There is no danger for the financing of the federal budget. The retained debt will, as usual, be placed on the secondary market.”

Reporting By Sarah Marsh

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