Italian Sovereign
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Public sector borrowers soaked up huge demand in the euro market on Tuesday including the State of North Rhine-Westphalia, which printed its biggest ever 100 year bond despite offering a yield of less than 1%. -
Italy is at an advanced stage with its green bond framework with a highly anticipated debut deal in the format expected to arrive this year, according to the Italian Treasury.
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Italian MPs are threatening to use a vote in parliament this week to derail a recent EU agreement on planned reforms for the European Stability Mechanism (ESM).
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Italy made a strong return to the dollar market on Tuesday with a deal over three times covered, which came following the conclusion of the sovereign’s second BTP Futura bond sale at the end of last week.
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Dollars was the flavour of the day for public sector borrowers on Tuesday as three issuers headed to the currency, raising a combined $12bn. Two more SSAs will follow with dollar deals on Wednesday.
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Italy received less interest for its second BTP Futura bond last week than its inaugural deal in the format earlier in the year.
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Italy held a series of investor calls on Thursday in preparation for a trip to the dollar bond market. Italy returned to the currency last year after almost a decade away, and announced that it intends to access the market every year.
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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, October 26. The source for secondary trading levels is ICE Data Services.
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Italian government bonds rallied across the curve on Monday after S&P upgraded its outlook on the sovereign on Friday in response to the country’s extraordinary fiscal measures and support from the European Central Bank’s asset purchase programme and the European Union’s incoming recovery fund. The positive sentiment bodes well for the imminent publication of Italy’s green bond framework and plans to return to the dollar market in the coming weeks.
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The strong momentum in the euro public sector bond market continued on Thursday with Italy receiving a huge reception for a new 30 year line, which was sold alongside a tender of various outstanding Italian government bonds.
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Italy and the Province of Québec will add to the euro public sector supply on Thursday, hoping to capitalise on the strong momentum in the currency following the European Union’s record order book earlier in the week.
