Italian Sovereign

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, February 17. The source for secondary trading levels is ICE Data Services.

Italy is considering the sustainability-linked bond format pioneered by Italian electricity and gas company Enel, but Davide Iacovoni, head of Italy’s debt management office, thinks the structure may not suit the sovereign’s priorities of ensuring liquidity and maximising reach.

Rating: Baa3/BBB/BBB

Borrowers hit screens in euros from three to 50 years this week, all enjoying heavily subscribed books and pricing with skinny new issue premiums thanks to investors’ confidence in consistent support from the European Central Bank.

Investors in the SSA market are piling into long dated bonds, leaving aside any coronavirus-driven fears and swelling the order books on 30 year and 50 year paper to record breaking levels, in what bankers are calling a 'one way market'.

Italy printed €9bn with a 15 year benchmark on Tuesday, wowing onlookers with a new Italian order book record and a 4bp move from initial price thoughts.

Italy is on screens with a 15 year benchmark, opting for the long end of the curve in spite of the concern some bankers have expressed about the difficulty of selling long dated debt.

Cassa Depositi e Prestiti will come to market on Tuesday with a 10 year euro benchmark financing social housing projects in Italy.

Rating: Baa1/A/A-

A triple-A rated supranational and two sovereigns from the eurozone periphery took the opportunity to lock in low rates at the long end this week, amid strong market conditions. SSA bankers expect more supply to follow at this part of the curve over the coming weeks, including from France and potentially Greece.

Italy and Belgium were the latest eurozone sovereigns to build their largest ever order books for syndicated bonds on Wednesday, with the former coming close to breaking the record demand from a eurozone issuer set by Spain on Tuesday.

Spain and Cyprus attracted strong demand for their syndicated bonds on Tuesday, with the former receiving the largest ever order book for a public sector euro benchmark. Italy and Belgium will add to the eurozone sovereign supply on Wednesday after mandating leads for new 30 and 10 year trades, respectively.