MILAN: Italy's Treasury wants to raise at least 2 billion euros ($2.3 billion) in a 50-year government bond sale which it may issue through a bank syndicate in the next few weeks, two market sources said on Tuesday.
The Treasury has been sounding out banks to gauge market demand for a 50-year issue from a sovereign with the euro zone's second-highest public debt level as a proportion of GDP.
It would be the first time Italy sells 50-year debt through a syndicate of banks rather than through a private placement. Last year it privately sold 500 million euros of a 50-year bond.
"They are aiming for a pilot issue of a 50-year BTP (nominal bond) worth at least 2 billion euros," one of the sources said.
The two sources said the Treasury could decide to sell the bonds in the coming weeks, but two other market sources contacted by Reuters said they thought it would be more likely after Italy's summer break.
The Treasury is trying to lengthen the average life of Italy's 2 trillion euro debt.
In April its first-ever sale of a 20-year nominal bond drew over 17 billion euros in demand from investors.
The 2036 bond was then issued for 6.5 billion euros. As recently as last week, Italy sold 1.9 billion euros of a 2034 bond in an exchange auction.
Negative yields on short-term bonds have boosted investor demand for longer-dated paper as they seek better returns.
Both Belgium and France sold 50 year bonds in April.
Italy's head of debt Maria Cannata told Corriere della Sera daily on Monday the Treasury would go ahead with a 50-year issue if it was certain of meeting enough demand to make it a success.
Comments
Comments are closed for this article.