Italian Sovereign

Demand was buoyant for auctions of Italian and Spanish paper on Tuesday, after European politicians agreed a conditional deal in the small hours of that morning to ease Greece’s debt burden.

Italy is looking to build on a strong performance over the past few months by launching a new syndicated 15 year euro benchmark next year, SSA Markets can reveal.

Cassa Depositi e Prestiti (CDP) has added to a record breaking year in private placements with its largest deal since March.

Spain remained square in the harsh glare of investor sell offs on Tuesday as fellow peripheral eurozone strugglers Greece and Italy comfortably raised more than €10bn in short term debt.

Italy provided the glamour at the end of a bumper week for the Eurozone periphery as it sold the largest bond of all time and attracted a heavy dose of international demand.

Peripheral eurozone sovereigns raised nearly €30bn this week across a range of maturities amid a surge in demand based on pepped up hopes of a Spanish bail-out.

The Republic of Italy provided some positive news ahead of a busy week for periphery eurozone countries, as its third BTP Italia bond attracted more interest in a few hours on Monday than the previous issue did over four days.

The Republic of Italy’s near term funding prospects are looking brighter as a €30bn cut in its 2013 funding needs and better than expected production data boosted sentiment for the sovereign, analysts told SSA Markets.

Italy demonstrated a command of investor confidence on Thursday morning with a strong auction performance that saw issuance near the upper end of the targeted range and at yields considerably through where the same debt had been issued in August.

The Kingdom of Spain’s short term borrowing costs are on an upward march again and could shoot even higher unless the government accepts a bailout package from the EU, analysts have warned.

Italy sold 2015 debt at its lowest levels in two years on Thursday, following strong bidding in the past week after the ECB’s announcement of the Outright Monetary Transactions bond buying programme.

Italy is set to auction up to €6.5bn BTPs on Thursday in a sale that will include the first reopening of the sovereign’s March 2026s since July 2011. The sale will come a day after Italy slashed treasury bill yields in a €12bn auction.