Greece's borrowing costs rose at the sale of €4.06 billion of Treasury bills as it raised the most at an auction in more than a year to pay for a bond redemption later this month.

Greece sold the 13-week bills today to yield 4.43 per cent, up from 4.28 per cent at the previous auction on July 17th.

Investors requested 1.36 times the amount sold compared with 2.12 times previously, the Athens-based Public Debt Management Agency said.

Delays in implementing an economic-reform program tied to €240 billion of bailout loans from the euro bloc and the International Monetary Fund have led to a funding squeeze for Greece, with no more aid to come before next month.

Before then, the country must redeem two Greek bonds on the European Central Bank's books, totaling €3.1 billion, which mature next week.

The rate on Greek debt due in February 2023 was 16 basis points higher at 24.5 per cent at 12.25pm, with the price falling to 19.62 per cent of face value.

The yield on Italy's two-year note fell four basis points to 3.44 per cent after earlier climbing as much as eight basis points. Spain's two-year rate was little changed at 4.27 per cent after climbing to 4.34 per cent.

Treasury bill sales are the only source of private finance Greece relies on after two rescue packages. The country secured the second package in March, after private creditors wrote down about €100 billion of their bond holdings.

Bloomberg