Italy has successfully sold its latest issue of government bonds, but it had to offer the highest returns on record to ensure they were all purchased.
The new 15-year bonds offer a yield of 5.9%, an all-time high for Italian bonds of that duration.Five-year bonds were also released, with a yield of 4.9%, the biggest since June 2008. Demand for these was double the release.
The sale raised a total of 2.97bn euros ($4.2bn; £2.6bn).
Financial analysis group Forex said the share sale would do little to boost confidence in Italy's finances.
"While the auction will most likely be spun as a success, there are some worrying signs and Italy won't be able to continue to have debt auctions like this indefinitely," it said.
In addition to the all-time high yield, Forex highlighted the fact that the markets had expected the Italian government sell more bonds than it did in Thursday's issue.
It added: "There were rumours that Bank of Italy officials had staged a charm offensive to major banks and financial institutions to ensure they participated in the auction."
The Italian senate is preparing to vote on a tough austerity budget, which proposes cuts of 48bn euros over three years. Italy wants to reduce one of the largest budget deficits in the eurozone and avoid any need for a European Union led bail-out.
Correspondents say the budget is likely to be approved by the upper house later, and then in the lower house on Friday.
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