Germany attracted healthy demand from investors wanting to lend to the country on Wednesday despite offering no interest payments at a two-year bond sale, as worries about a Greek euro exit heightened demand for safe-haven assets.

The lack of coupon failed to deter buyers worried that a new Greek government will reject the terms of the country's bailout, possibly forcing it to ditch the euro. Contagion from a so-called Grexit could pile pressure on other euro zone strugglers.

Germany sold 4.56 billion euros ($5.8 billion) of the new two-year bonds, which carry a zero percent coupon, and with an average yield of just 0.07 percent, it was almost free money for the country.

"(It) was a strong auction, with some overbidding which is not always the case in German auctions, so clearly there were some investors who see value in the Schatz at a near-zero yield," said Credit Agricole rate strategist Peter Chatwell.

The ultra-low borrowing cost is in stark contrast to rising borrowing costs in countries engulfed in the euro zone debt crisis.

For example, yields on benchmark two-year Spanish and Italian bonds, which reflect borrowing costs, are 4.12 percent and 3.58 percent respectively, while France paid investors a yield of 0.74 percent at a two-year bond sale last week.

Moreover, with German government bond yields falling over the last year to record lows and with euro zone inflation at an annual rate of 2.6 percent last month, investors are losing money in real terms.

Bids at the sale were worth 1.7 times the amount on offer, in line with the average at similar auctions this year.