Investors more fond than ever of southern European debt

Posted on Apr 10, 2021 9:01 AMUpdated Apr 10, 2021, 9:32 AM

Investors have their hearts in the South. Last Wednesday, two bond issues, one from Italy and the other from Portugal, aroused unprecedented enthusiasm. Lisbon recorded nearly 33 billion euros in orders for 4 billion offered. And Rome drew 132 billion euros in bid for a 12 billion euro transaction in two installments, one at seven years and the other at fifty.

Demand was distributed almost evenly between the two tranches and enabled Italy to improve the price offered. », Explains Michele Cortese, at Societe Generale. Including for 50-year bonds, while in recent weeks, investors seemed to shy away from longer securities, for fear of an imminent rise in inflation. ” Admittedly, interest rates in the euro market have risen since the start of the year, but the yield conceded, 2.17%, remains below the average cost of the Italian debt and extends its average duration, which is very beneficial for the Treasury », Continues Michele Cortese.

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