2012.07.2308:23:00UTC+00German 12-month Bubill Yield Negative

The yield on Germany's 12-month treasury bill fell into negative territory at an auction on Monday as investors flocked to safe haven debt amid rising worries over Spain and Greece.

The country sold EUR 2.703 billion of its 12-month treasury bill or Bubill to yield -0.0540 percent, which was less than 0.0191 percent paid on June 25. The auction attracted bids totaling EUR 6.338 billion against the EUR 3 billion offered.

The bid-to-cover ratio, which reflects demand, dipped to 2.3 from 2.8 in June.

Meanwhile, Spain's borrowing costs surged on Monday amid increased concerns that the country would seek a bailout for its entire economy. Such worries were aggravated by media reports that Murcia would be the second in line to seek assistance from the government after Valencia signaled need for help last week.

Reports also said six out of the 17 Spanish regions are likely to seek bailout from the government.

Speculation of a 'Grexit' also resurfaced on Monday after the German magazine Der Spiegel reported on Sunday that the IMF is unlikely to give any further aid to Greece. The news has just ahead of the troika - the European Commission, the European Central Bank and the IMF - visit to Athens tomorrow.