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Italy's Dipartimento Del......>

ITALY AUCTION PREVIEW: Italy's Dipartimento Del Tesoro tap its 5-year benchmark
0.95% Mar-23 BTP for between E2.25-E2.75bln and 10-year benchmark 2.0% Feb-28
BTP for between E2.5-E3.0bln and launch a new 7-year Sep 2025 CCTeu for between
E3.0-E3.5bln Friday.
- BACKGROUND: The 5-yr and 10-yr BTPs are the same bonds as offered last month
but with BTPs outperforming in last 2-weeks, does not bode well for the auction.
Source reported continued domestic buying in the 3-yr to 10-yr sector of BTPs
yesterday and saw good interest in the new CCTeu.
- RV/HISTORY: BTPs have performed strongly since the election, even though no
government has yet been formed. 10Y Bund-BTP spread is 116.5bp just off
multi-year low of 110.5bp seen just 2-days ago. While versus Spain, 10-yr BTPs
have outperformed 10-yr Bonos by 18bps since last auction in March. The 5Y 0.95%
Mar-23 has widened vs previous BTP bmk. Normally, the 10Y bmk would have a heavy
foreign participation but recent outperformance of BTPs may inhibit the bid. The
new CCTeu Sep-25 is ASW+52bp and compares to ASW+51.1bp for Apr-25 CCTeu.
- TIMING: Auction cut-off is 1000BST, results are around 1015BST.

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