The US treasury has sold $21 billion of 10-year notes at a record low yield as speculation France may lose its top credit rating amid Europe’s worsening debt crisis bolstered the refuge appeal of US government securities.

The bonds drew a yield of 1.90 per cent. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of debt offered, was 3.29 versus an average of 3.11 for the past 10 auctions. It was the second of three note and bond auctions totalling $66 billion this week.

The yield on the current 10-year note fell seven basis points, or 0.07 percentage point. – (Bloomberg)