Italy sold its first 50-year bond on Tuesday as some investors bet the European Central Bank may soon add ultra-long debt to its asset-purchase stimulus scheme. About 16.5 billion euros of orders were placed for the bond - 5-1/2 times the expected sale amount, despite concerns over Italy's banks and an upcoming referendum that could unseat its prime minister.
Many of the fund managers who lend to Italy - and those who have already bought 50-year bonds from France, Belgium and Spain this year - may not live to see it paid back. Those who signed up to Ireland's 100-year bond in March almost certainly won't. But they could make quick gains if the ECB extends the maturity limit on its bond-buying scheme later this year, in an attempt to prolong its 1.7 trillion euro programme.
Yields on Italy's outstanding bonds rose slightly on Monday, as often happens when investors make room in their portfolios for new supply, but they remain near record lows touched at the start of 2015. Thirty-year yields rose 3 basis points to 2.29 percent , having fallen steadily from highs of nearly 8 percent touched in the bloc's 2011 debt crisis, and were just above a record low 1.92 percent seen in March 2015 around the launch of QE.
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