Italy

Fresh lockdown restrictions added to a sense of anxiety in Europe at the start of the week, with credit markets already on tenterhooks ahead of the US presidential election.

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.

Nearly half of Europe’s banks do not intend to participate in the next rounds of the Targeted Longer-Term Refinancing Operations (TLTRO III), according to the results of a new survey published by the European Central Bank this week.

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.

UnipolSai Assicurazioni was nearly three times subscribed for a restricted tier one (RT1) this week — the first of its kind in Italy. An attractive coupon helped to offset any concerns about Italian sovereign risk or a lack of liquidity in the RT1 market.

Italian insurer UnipolSai Assicurazioni will be hoping to launch its first restricted tier one (RT1) bond this week, after which it could retire a pair of its lower quality tier two instruments.

Euronext is preparing for a €2.4bn equity raise after it agreed a deal with London Stock Exchange Group for the Borsa Italiana.

Private equity firms Bain Capital, Advent International and Clessidra have completed a huge sell-down of stock in Nexi, days after the Italian payments company unveiled plans for a €4.6bn merger with Sia, a close rival.

The European Banking Federation (EBF) has called on regulators to be more flexible in handing out minimum requirements for own funds and eligible liabilities (MREL) to newly merged businesses, as a way of encouraging consolidation.