May 19, 2020 / 3:56 PM / 2 months ago

UPDATE 1-Italy's new BTP Italia issue gets stronger demand than last one

(Recasts with data at the end of the day)

ROME, May 19 (Reuters) - Italy sold a further 4.77 billion euros ($5.21 billion) of its new BTP Italia bond to small savers on the second day of a retail offering, drawing higher interest than the last issue in October, bourse data showed on Tuesday.

The inflation-linked bond, which has a maturity of five years and pays a premium of at least 1.40% over the domestic inflation rate, raised 4.02 billion euros on Monday.

Retail investors bought 2.99 billion euros of a similar bond - an 8-year maturity note - and institutional investors 3.76 billion euros in a three-day sale in October.

Proceeds from the latest issue will be used to help offset the hit from the COVID-19 crisis to the economy, which is expected to shrink by as much as 13% this year under the worst case scenario of the Bank of Italy.

The Treasury will offer the new retail linker to small savers until Wednesday’s market close. The same bond will be offered to institutional investors on Thursday.

The Treasury meets demand from retail buyers in full, but reserves the right to cap the amount it allots to professional buyers.

$1 = 0.9151 euros Reporting by Antonella Cinelli and Sara Rossi; editing by Giulia Segreti and Mark Potter

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