France's government bonds fell after Moody's Investors Service yesterday lowered the nation's top credit rating, citing a worsening economic growth outlook.

French 10-year bonds dropped for the first time in four days after Moody's cut the nation's rating to Aa1 from Aaa and maintained a negative outlook on the debt.

Germany's 10-year yields were three basis points from an 11-week low as European finance ministers prepare to meet in Brussels to discuss aid for Greece.

Spain plans to sell as much as €4.5 billion of bills today.

France's 10-year bond yield rose two basis points, or 0.02 percentage point, to 2.10 per cent at 7.23am London time.

The 2.25 per cent security maturing in October 2022 fell 0.21, or €2.10 per €1,000 face amount to 101.36.

German 10-year yields declined one basis point to 1.34 per cent.

The rate dropped to 1.31 per cent on November 13, matching the lowest since August 31.

France's downgrade by Moody's follows one by Standard and Poor's in January and increases pressure on President Francois Hollande to find ways to bolster growth. S&P cut the nation's rating by one level to AA+ from AAA on January 13.

European Union finance chiefs will try to plug a €15 billion hole in Greece's finances.

EU lawmakers last week gave the nation an extra two years to reach budget-deficit goals, even as the International Monetary Fund disagreed over extending the deadline.

German bonds returned 3.9 per cent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spanish securities gained 2 per cent, and French debt earned 9.2 per cent.

Bloomberg