MILAN (AP) — Italy has easily raised €3.5 billion ($4.64 billion) in the sale of 3-year bonds, paying the lowest interest rates for such debt since March 2010, as investors shrug off political uncertainty ahead of elections.

The borrowing rate dropped to 1.85 percent, from 2.05 percent at the last such auction last month. Demand was 1.45 times the offer.

Michael Hewson, senior analyst at CMC Markets, says the rates are dropping despite uncertainty over elections next month because investors see "diminishing risks of a potential euro break-up. "

The election is a race between centrist forces backing caretaker Premier Mario Monti, former Premier Silvio Berlusconi's center-right alliance with the Northern League and the center-left Democratic Party led by Pier Luigi Bersani. Bersani leads in the polls and has pledged to continue reforms.