Agile Tesoro strives to balance regularity and flexibility

Italy’s Tesoro picked up in the first week of 2014 where it left off at the end of 2013, selling €4bn of three year BTPs at a yield of 1.51% in the first auction of the year in early January. That did not just represent the lowest cost of funding Italy had achieved since the introduction of the euro. It was also a very far cry from the make-or-break auctions in late 2011, when the Tesoro was paying yields of close to 6.5% for five year funding. The success of this year’s first auction built on the spectacular momentum that developed for Italy in the local as well as the international capital market throughout 2013. The factors driving this performance, and the sustainability of the rally in BTPs, were some of the topics discussed at the Tesoro roundtable held in Rome in early February.