Italy debt agency official says Italian debt demand remains high

LONDON, March 6 (Reuters) - Italy is providing investors with a good opportunity to match low risk and high yield, the head of the country's debt agency said on Wednesday, adding that there was good demand for the country's longer-term debt.

Italian debt has been hit by political uncertainty after elections delivered a hung parliament, raising the risk of a return to the polls and prolonged paralysis of the country's efforts to bring its 2 trillion euro public debt under control.

But Maria Cannata, the country's head of public debt management, said investors were keen on Italian debt.

"There is a big appetite ... in the long-dated maturity after two years when the market was almost frozen... Italy (has the) ideal combination of low risk and a good game in terms of its return," she told a Euromoney bond conference in London.

Ten-year borrowing costs rose to their highest in four months at a debt auction last week though the European Central Bank's longstanding but untested bond-buying backstop has staunched a sharp sell-off of the bonds in the secondary market.

Italy's 10-year bond was yielding 4.64 percent on Wednesday, down around 10 basis points on the day, compared with a yield of 1.47 percent on German equivalents.