Italian Sovereign

SSA bankers lauded Portugal on the timing and execution of a dual tranche benchmark deal on Tuesday, as investors ploughed into the offering. Elsewhere, Spain revealed its syndication plans for 2015 and Italy broke records at the long end of the curve.

Portugal is set to visit the 30 year part of the curve for the first time since 2006, after mandating banks for a rare dual tranche deal on Monday. Italy and Spain are also rumoured to be looking at euro deals this week, which is already busy with auctions in the eurozone periphery.

Eurozone periphery yields dipped on Thursday after the latest sovereign bond buying wink from European Central Bank president Mario Draghi. That bodes well for Italy, which has a pair of auctions lined up for next week, while Spain was able to cut its long dated funding costs at auction on Thursday.

Although the eurozone sovereign debt market shrugged off a collapse in Greek bonds this week after the country brought presidential elections forward, other periphery countries could still see sell-offs around their own votes next year, bankers warned this week.

A pair of eurozone periphery sovereigns suffered rising yields at short end auctions on Wednesday, as the region’s bonds sold off for a second straight day in secondaries.

Greece’s yields went spiralling into orbit on Tuesday ahead of an auction of the country’s short term debt on Wednesday, with the yield on its five year comeback syndication from earlier this year reaching its highest level yet.

Italy hit its lowest five and 10 year yields of the eurozone era at auction on Thursday, as the country benefited from more hints from the European Central Bank that it is preparing to launch sovereign quantitative easing. The auctions came as the Italian Treasury worked on a plan to shift some of the country’s regional debt onto the central bank balance sheet and outlined plans for a return to the dollar market next year.

UniCredit Italy has revitalised hopes for the conditional pass through (CPT) covered bond structure which was pioneered by NIBC over a year ago and was at risk of being ignored by everyone else. The Italian national champion has restructured one of its covered bond programmes from a soft bullet maturity and intends to sell bonds from it next year.

Spain could wrap up its funding target for the year at an auction of three and five year debt on Thursday, but while the yield is likely to fall on the shorter bond the longer dated paper’s yield is set to rise. Meanwhile, Cassa Depositi e Prestiti looked set to pass its first syndication test since May after setting pricing on a January 2018 bond at the tight end of initial price thoughts on Wednesday.

Shares in Rai Way, the broadcasting infrastructure arm of Italy’s state-owned radio and television station Rai, began trading this week, after the company priced its €280m IPO at the bottom end of the range.

Investment banking profits look poor at the two big Italian banks, UniCredit and Intesa’s investment bank Banca IMI.

Società Cattolica di Assicurazione, the Italian insurance company undertaking a €500m rights issue, looks set to provide its underwriters with a nervy few weeks. The shares began trading ex-rights on Monday and have already fallen to within 14% of the subscription price.