Italian Sovereign

The European Central Bank's covered bond purchase programme (CBPP3) turned relative value upside down this week, with a French deal pricing inside a similar Swedish offering, among a crop of four new issues.

Cassa del Trentino showed one of the big advantages of an MTN programme when it nipped in to take advantage of a one day rally in Italian government bonds and save precious basis points on its funding costs.

Monte dei Paschi di Siena, Italy's oldest bank, is to launch a €2.5bn fully-underwritten rights issue as part of its response to the Comprehensive Assessment's finding of a capital shortfall.

Casino equipment provider GTech SpA and its subsidiary GTech Corp have completed a $2.6bn five year multicurrency revolving facility in dollars and euros.

Italian power utility firm Enel is set to sell part of its stake in Spanish peer Endesa for up to about €3.4bn, through an underwritten secondary public placement.

Cassa del Trentino has showed one of the major advantages of nurturing a medium term note programme by nipping in to take advantage of a one day rally in Italian government bonds to save precious basis points on its funding costs. As a small, infrequent issuer, the borrower showed some of its peers what can be achieved by taking the MTN route.

The board of Monte dei Paschi di Siena, the world's oldest bank, is considering a capital increase to cover its entire €2.1bn shortfall, flagged up by the comprehensive assessment last week.

China’s Bright Food, which announced in October that it was acquiring a majority stake in Italian olive oil manufacturer Salov, is wrapping up a loan of around €120m ($152m) with three lenders.

The Province of Trento’s funding arm Cassa del Trentino came to market early with a long dated medium term note to take advantage of strong performance in Italian government bonds. Meanwhile, Cassa Depositi e Prestiti mandated banks for a roadshow.

Gruppo Sostenya’s subsidiary Waste Italia is hoping to issue its first bond late next week, once it has completed a roadshow that began on Monday in London with Jefferies as bookrunner.

The European Central Bank’s covered bond purchase programme entered a new phase this week as eurozone issuance enabled it to buy the primary market, rather than relying on secondary where supply is drying up. Its buying is good news for peripheral banks but may cause investors to desert the core.

Italian SSAs drew a mixed bag this week, as one sub-sovereign outlined plans for a long dated deal, while the Italian government’s borrowing costs rose in a series of auctions except a sale of 10 year debt — which only the vagaries of the repo market kept in check.