Italian Sovereign

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.

Pirelli, the Italian tyre producer, launched its first bond for two years on Thursday, and its first in euros since February 2011, and achieved a tremendous blowout, with a book of well over €5bn before reconciliation.

Pirelli, the Italian tyre producer, launched its first bond for two years today, and its first in euros since February 2011, and achieved a tremendous blowout, with a book of well over €5bn before reconciliation.

Waste Italia, a waste management subsidiary of Italy's Gruppo Sostenya, priced its debut bond on Thursday afternoon in New York time, though it had to sweeten the terms for investors.

UniCredit Group’s €2bn profit target for 2014 is within grasp after a decent set of third quarter results, which showed an improvement over last year at the group level. But the investment bank’s profits are still down on last year, despite an improvement in loan values for the first time in two years.

UniCredit has hired a new head of high yield syndicate from a private equity firm.

Rights and shares in Societa Cattolica di Assicurazione, the Italian insurance company, began trading separately today for the first time.