Italy's rates down at 5- and 10-year bond auction

(MILAN) - Italy raised 5.645 billion euros ($7.258 billion) in a five- and ten-year bond auction on Thursday, slightly less than targeted but at lower rates, despite fresh debt-crisis nervousness.

The Italian Treasury issued 2.718 billion euros in bonds set to mature within five years at a rate of 4.09, compared to 4.63 percent at the last similar operation on August 30.

It also issued 2.927 billion euros' worth of 10-year bonds at a rate of 5.24 percent, down from 5.82 percent at the end of August.

Demand was slightly lower than at last month's medium to long-term bond auction, but Rome also raised one billion euros through credit certificates due to expire in 2017 at 4.56 percent, down from 5.33 percent at the last operation.

The bond session had been seen as a test for Rome, amid fresh concerns that Italy may yet fall prey to debt-crisis contagion from sickly Spain, as markets anticipate Madrid will be forced to ask for a full sovereign bailout.

Though Italy benefited from lower rates following the European Central Bank's recent decision to help struggling eurozone states, market tensions have increased again and Italian stocks plunged more than 3.0 percent on Wednesday.