Italy's latest syndicated issuances draw strong demand from foreign investors

MILAN, Sept 3 (Reuters) - Foreign investors bought 77.5% of a new Italian seven-year BTP bond sold via syndication and 75.5% of a similar 30-year note, the Treasury said on Wednesday, in a sign of strong appetite for Italian paper from overseas investors.

On Tuesday, Rome issued a total of 18 billion euros ($21.07 billion) through the two BTP issuances, attracting total orders for around 217 billion euros, even as long-end bonds came under pressure globally amid renewed fiscal woes.

In France, 30-year government bond yields on Tuesday hit their highest levels in over 16 years, while the yield on British 30-year paper was the highest since 1998, driven by concerns about errant government finances in both countries.

Fund managers were allotted 41.6% of Italy's 7-year sale and 37.7% of the 30-year bond, while banks subscribed 30.4% and 19.9%, respectively, the Treasury said.

Rome has benefited slightly more than other euro zone peers from political uncertainty in France, where Prime Minister Francois Bayrou's government faces a no-confidence vote on Monday.

The gap between French and Italian bond yields, which was over 150 basis points just two years ago, narrowed to below 10 basis points at the end of last month. FR10IT10=RR

The new BTP due November 15, 2032 will pay a gross yield of 3.330% and the new note due October 1, 2055 will pay 4.732%.

The Treasury hired BBVA, Citibank, Deutsche Bank, J.P. Morgan, Morgan Stanley and Nomura for the sale.

In a recent dual-tranche issuance in June, the Treasury attracted demand of over 214 billion euros, printing 12 billion from a new 5-year bond and 5 billion from a tap of a Green BTP bond maturing in 2037.

($1 = 0.8542 euros)