Italy

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.

Covered bond issuers using programmes containing a special purpose vehicle (SPV) have more guidance on the treatment of bad loans and protect bondholders further compared with those using integrated templates, Fitch said this week when assessing the risk coronavirus era mortgage payment holidays pose to the asset class.

STMicroelectronics, the French-Italian semiconductor maker, has raised $1.5bn through the sale of new convertible bonds, the company said on Tuesday.

EMEA’s equity capital markets were buzzing on Friday morning after Goldman Sachs placed a 13.2m block of shares in Cellnex, the Spanish telecoms tower company, which allowed the company’s largest shareholder to monetise rights that it intends not to exercise in the issuer's forthcoming €4bn rights issue.

Citi has appointed Cristina Paviglianiti and Luca Sabbatini to run markets and securities services in Italy, adding to a series of recent appointments across its European investment bank.

Analysts think Intesa Sanpaolo will succeed in winning over UBI Banca’s shareholders after sweetening the terms of its takeover bid. The merger deal is seen as an important test case for consolidation in the Italian banking sector.

Terna, the Italian high voltage grid operator, issued a green 12 year €500m no-grow bond on Friday.

Gambling firm Gamenet sold €640m in fixed and floating senior secured notes this week, in a bid to refinance its take-private by private equity firm Apollo as well as two outstanding floating rate notes. The Italian company amended a raft of terms to sweeten the deal for investors.

Rating: Baa1/BBB+/BBB-

Financial institutions are set to spend the summer months monitoring conditions for issuance in order to continue funding this year or to frontload funding needs for next year, according to deal arrangers.

The European Commission’s best practice guidelines for the financial sector in handling the coronavirus crisis may challenge the safety mechanisms embedded in covered bonds, which have become fundamentally overvalued — especially in countries like Italy where payment holidays have been widely taken up — thereby instigating a sell recommendation from analysts at Barclays.

Italy’s €178bn covered bond market comprises a wide variety of structural nuances that are likely to prove critical to understanding underlying risks, especially when it comes to the way swaps are used and the methodology for asset coverage (ACT) and amortisation tests (AMT), said Moody’s this week.