Italy’s latest bond sale has been greeted with overwhelming demand, garnering more than €88 billion ($100 billion) of investor bids. The two-tranche offering, opened on Wednesday, comprises a €5 billion seven-year bond and a €30-year inflation-linked bond of €3 billion. The transaction takes advantage of a recent upgrade by S&P, which had bumped Italy’s credit rating to BBB+ with a stable outlook, citing better economic stability and achievement in managing public finances.
Spreads on the offer were tightened by 1 and 2 basis points, reflecting firm investor demand. The sale follows a rally in Italian bonds, with the 10-year BTP spread tightening to 120 basis points over German Bunds from a five-month high of 134 basis points. Finance Minister Giancarlo Giorgetti had emphasized that no new borrowing would be needed, confidence in the run-up to the deal.
BBVA, BofA Securities, Goldman Sachs, JP Morgan, Natixis, and Societe Generale are running the book on the bond sale. The high demand reflects growing investor confidence in Italy’s fiscal health and is a positive step in its ongoing economic revival.
