Italian Sovereign

GTech, the Italian gambling technology firm that used to be called Lottomatica, has slimmed down its $10.7bn bridge loan for its acquisition of International Game Technology of the US to $10.2bn.

Italy is set to take a hit on its funding costs at an auction of medium to long term bonds on Thursday, as the sovereign has failed to fully recover from a violent jump in yields two weeks ago. If yields rise as analysts expect, it will be the third day in a row that Italian funding costs have risen at auction, following a bill sale on Wednesday and an offering of zero coupon and inflation linked paper on Tuesday.

Fiat Chrysler Automobiles, formed after a merger earlier in the month, is set to float its stake in luxury brand Ferrari as part of a shake-up of the firm.

Italy could be in for pain at auction this week as the sovereign’s curve has yet to fully recover from a spike in yields caused by a sharp sell-off in peripheral sovereign debt two weeks ago. It printed two year paper on Tuesday at a yield almost double that of a month ago.

Italy's Banca Carige is set to raise around €650m through a capital raise that will form part of its response to the weekend's Asset Quality Review and stress test results, alongside asset disposals and other moves.

Rhiag, the Italian car parts distributor, has priced a €50m tap of its €215m 2020 bond at par.

In this round-up, RMB deposits in Taiwan break past Rmb300bn in September, Macau RMB deposits and RMB cross border trade fell slightly in August, the Hong Kong-Shanghai Stock Connect initiative looks likely to be launching later than expected, and a Canada-China currency swap line could be coming in November.

Italy has sold its smallest BTP Italia since the dark days of the eurozone debt crisis, partly because of a sharp fall in retail demand. The lack of domestic interest — despite the coupon on offer increasing during the book build process — could be a warning sign for the sovereign, said analysts, although others argued there were more technical aspects at play.

Asset managers Tikehau IM and Emisys have provided a six year €14.2m unitranche bond facility for the acquisition by a group of investors led by LBO Italia of GF SpA, a manufacturer of automated filling machines for the pharmaceutical industry. It is the first time such a debt structure has been used for this type of deal in Italy, people involved said.

On an extraordinary day in the capital markets, a very ordinary corporate bond was issued on Wednesday — a €500m 8.5 year issue for Snam, the Italian gas transport group, that was nicely oversubscribed and closed trading at reoffer.

Exor, a principal holding company of the Agnelli family, which founded Fiat, on Wednesday issued its first bond since 2007. Despite shaky market conditions, the 10 year bond attracted ample demand, helped by the fact that it offered about 150bp of spread — not available every day on investment grade paper.

Bankers are often cagey when it comes to talking about sensitive commercial data, but Italians are always game to talk politics - and have a knack for the clear if unconventional analogy. This was proven once again when Loan Ranger was getting the latest on the Italian market.