Italy's issuance of new 30-year debt drew over €130 billion in orders, as investors sought to secure the region's highest yields before an anticipated interest rate cut by the European Central Bank (ECB) later this week.

The country's Treasury is offering €8 billion in bonds maturing in October 2054, priced with a spread of 13 basis points over similar debt.

This demand surpasses the previous record set in 2020, shortly after the pandemic began, when the ECB was actively purchasing bonds to bolster the economy.

Italian yields have declined in recent months as the ECB begins its rate-cutting cycle, with expectations that policymakers will lower the deposit rate by an additional quarter-point to 3.5% on Thursday. 

Money markets anticipate that there will be six more rate cuts by the end of next year, as inflation remains near the central bank’s 2% target, Bloomberg reports.

The sale occurred on a busy day for debt issuance in Europe, with at least €21 billion expected to be raised from various borrowers, including Austria's Bawag Group AG and France's Electricité de France SA. 

September is generally a busy month for global debt issuance. This year, the US has seen particularly high activity, as issuers are capitalising on favourable funding conditions in credit markets before the Federal Reserve’s rate decision next Wednesday.

The bookrunners for the new bond deal are Barclays plc, Bank of America Corp, BNP Paribas SA, Citigroup Inc, and Société Générale SA, Bloomberg goes on to add.