Italian Sovereign

Italy received less interest for its second BTP Futura bond last week than its inaugural deal in the format earlier in the year.

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.

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.

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.

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.

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.

The Italian Ministry of Economy and Finance will issue a second BTP Futura next month, following its debut bond in the format earlier this year, as part of its plans to seek greater participation from retail investors to fund its additional borrowing needs resulting from the coronavirus pandemic.

Rating: Baa3/BBB/BBB-

All eyes were on Italy in the primary euro public sector bond market on Tuesday as it pipped Spain for the biggest ever order book for a eurozone sovereign syndicated bond in the 20 year part of the curve.

Italy is returning to the international debt market for another syndication, its first since June.

Italy will receive a €2bn loan from the European Investment Bank to help cover the reinforcement of its healthcare system required to deal with the coronavirus pandemic.

Following the sale of its first government bond targeted exclusively to retail investors last week, Italy may issue another such bond before the end of the year, depending on the evolution of its funding needs, which are still not finalised.