Italy sees record demand in first bond sale under Draghi

Italy drew record demand with a two-part bond sale on Tuesday, riding investor enthusiasm at the appointment of former European Central Bank chief Mario Draghi as prime minister.

Italy sold a 10-year nominal bond and a 30-year inflation-linked bond that attracted more than 134 billion euros ($163 billion) in orders, the most ever for an Italian syndicated debt issue, one of the banks managing the issue said.
 

Italy's 10-year bond yields fell to a record-low last week after head of state Sergio Mattarella asked Draghi to form a new government.

After weeks of political uncertainty, markets cheered the prospect of the trusted former central banker taking over at a time when Italy is grappling with a resurgent COVID-19 pandemic and its worst recession since the end of World War Two.

The Treasury set the yield on a new 10-year BTP bond at 4 basis points above the rate of an existing April 2031 BTP note, halving the initial indication of an 8 basis point spread.

The yield on a new 30-year inflation-linked BTP bond was set at 22 basis points over the existing September 2041 BTP linker, down from an initial guidance of 27 basis points.

The Treasury on Monday hired Citigroup, Deutsche Bank , Goldman Sachs, Monte dei Paschi di Siena Capital Services and Nomura to work on the deal.