Reply #1: Italy 7.7 bln eur bond sale gets market thumbs-up

[Joanne98]

* Yields on 2, 7, 10-year paper in 1.63-4.09 pct range

* Bid-cover ratios 1.39-1.80

* Ten-year spread vs Bunds holds steady

* Result 'a big vote of confidence from market'- analyst


LONDON, April 29 (Reuters) - Italy's sale of 7.7 billion euros of government bonds drew solid demand at relatively modest yields on Thursday, in a vote of confidence in the euro zone peripheral benchmark issuer's ability to withstand contagion from Greece.

Italy, which has the deepest and most liquid bond market among non-core sovereign issuers, was the first among the periphery to auction paper after a flurry of ratings downgrades from Standard & Poor.

The ratings agency this week cut Portugal and Spain and slashed Greece to junk status, spurring a wave of selling in peripheral bonds.

The Italian sale of two-, 10-year BTPs and seven-year paper drew bids for 1.80, 1.39 and 1.76 times the amounts on offer, respectively.

Yields ranged from 1.63 percent to 4.09 percent, compared with a range of 1.13 percent to 3.96 percent the last time the papers were sold in March..

"This is a big vote of confidence from the market. Italy have got the top end of the range away, and both of the (main) auctions have healthy bid cover ratios," said Peter Chatwell, a strategist at Credit Agricole in London.

http://www.forexpros.com/news/interest-rates-news/italy-7.7-bln-eur-bond-sale-gets-market-thumbs-up-133828

This is strange. Who would be buying Italian bonds right now.