February 6, 2019 / 10:51 AM / 6 months ago

UPDATE 2-Investors rush to buy Italy new 30-year bond, orders top 26 bln euros

(Mergers stories, adds details, context)

By Elvira Pollina and Giulio Piovaccari

MILAN, Feb 6 (Reuters) - Investors rushed to buy long-term Italian bonds on Wednesday, requesting more than 26 billion euros ($30 billion) worth of the note in little more than two hours - the latest sign of renewed market favour for the Treasury in Rome.

Italy launched the 30-year bond sale, its second syndicated deal in less than a month, taking advantage of more favourable market conditions after sealing a deal over its 2019 budget with the European Commission, a lead manager told Reuters.

A Milan-based trader said he expected a final size for the issue of 6 billion to 7 billion euros.

This would bring the amount of paper issued by Rome since the beginning of the year to over 67 billion euros, around 17 percent of this year’s total estimated needs.

Italy agreed in December to lower its deficit target for 2019 to 2.04 percent, ending a protracted row with Brussels which had contributed to months of market turbulence.

Italy raised 10 billion euros last month with a new 15-year bond, in its biggest ever syndicated bond sale, drawing total investor orders of more than 35.5 billion euros.

Before that, Italy had last sold syndicated debt in January 2018, months before the election of a populist government sapped appetite for Italian risk.

Italy’s Treasury revised its price guidance for the issue, due on Sept. 1, 2049, to around 20 basis points over its outstanding March 2048 bond, after setting an initial guidance at 20-22 basis points earlier on Wednesday, the lead manager added.

The Treasury expects to price the deal later on Wednesday.

Banca IMI, BNP Paribas, Credit Agricole CIB, Deutsche Bank and Goldman Sachs International Bank are the joint lead managers for the syndicated issue. ($1 = 0.8780 euros) (Writing by Giulio Piovaccari; Editing by Hugh Lawson)

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