The market response to the new issuance of securities by the Treasury exceeds expectations. Btp Italia’s four-day show, now in its 18th edition, concludes with a pool of subscriptions close to 12 billion euros (the exact figure is 11.994 billion). Yesterday was the final day of IPO for institutional investors, following the three-day offering for retail savers. Institutional investor subscriptions were 4.713 billion, which adds up to the 7.281 billion absorbed by retail market demand (there were 255,000 orders), for a total of nearly 12 billion. Yesterday morning the Ministry of Economy reported the annual (real) coupon rate for BTP Italia, setting it at 1.6%, the same level as the guaranteed minimum.
In short, the new version of BTP Italia confirms the forecast of the previous day which predicted a positive response in terms of subscriptions. The success of long-term Treasury bonds in their latest edition was determined by the decision to index them by inflation in the country, that is, the consumer price index for families of blue-collar workers and working people (FOI). The vouchers are paid out every six months with the capital revalued due to inflation in the same semester. A mechanism that, in view of the current price increase, can guarantee returns of up to 9-10%.
The term of the bond issuance is six years with a maturity of 2028. The minimum guaranteed real rate, as mentioned, is 1.6%. The Treasury, as on other occasions, envisaged a loyalty bonus: for the investors who bought the security in the issuance phase and who will hold it until the expected maturity , additional recognition equals 8 per thousand. The new Btp Italia issuance is a huge success for the treasury with very strong interest from retail and institutional investors. says Marco Latuada, Head of Investment Banking and Structured Finance at IMI CIB Division at Intesa Sanpaolo.
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