(Adds background, details on pricing)
By Matt Painvin
LONDON, March 7 (IFR) - The Republic of Italy is testing
investor demand for bonds linked to eurozone inflation, becoming
the first eurozone issuer to test the market depth for that type
of debt in 2017.
The sovereign has started marketing a May 2028 euro
benchmark at 13bp area over BTPei 3.10% September 2026.
It is the issuer's first foray in the format since May 2016
when it priced a €3bn May 2022 bond.
The marketing level sees the bond flat to 1bp cheap compared
to the longer BTPei 1.35% September 2032, according to a trader.
An update on the guidance is expected at around 10am.
Deutsche Bank, JP Morgan, MPS Capital Services, Societe
Generale and UBS were mandated for the deal on Monday.
The 144A/Reg S notes will be priced today. The bond is
linked to the eurozone HICP ex-tobacco.
The issuer is rated Baa2/BBB-/BBB+/BBBH
(Reporting by Matt Painvin, Editing by Helene Durand, Julian