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Italian sovereign debt now seen as riskier than corporate bonds

90% of the country's high-grade corporate bonds now earn a lower yield than government debt

The Italian Chamber of Deputies during the voting for the new president of Italy's Chamber of Deputies at Palazzo Montecitorio on March 24, 2018
The Italian Chamber of Deputies during the voting for the new president of Italy's Chamber of Deputies at Palazzo Montecitorio on March 24, 2018 Photo: Getty Images

After last week’s sell-off in Italian sovereign debt, 90% of the country’s high-grade corporate bonds now earn a lower yield than government paper, according to an analysis by Bank of America Merrill Lynch.

In other words, investors appear to view Italian corporate bonds as less risky than their government peers.

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