Italian BTPs rally after surprise upgrade with green framework and dollar bond expected soon

By Burhan Khadbai
26 Oct 2020

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.

After the market close last Friday, S&P affirmed its BBB long-term rating on Italy but upgraded its outlook from negative to stable.

S&P said the rationale for the upgrade was due to the Italian government’s fiscal stimulus measures worth an estimated 6.1% of GDP to mitigate the economic ...

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