Italian Sovereign
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While SSA syndicate bankers maintain that conditions in euros are still good, there was barely any issuance this week as attention turned to next week’s ECB meeting and a potential snap election looming in Italy. Meanwhile, the European Stability Mechanism and European Financial Stability Facility revamped their funding programmes in light of better than expected funding opportunities in the past few months. -
The Italian Treasury on Thursday bought back €4.2bn of the November 2017 BTP Italia — more than €1bn above its target amount — as part of a syndicated exchange that swapped the bonds for paper maturing in the 2020s and 2030s.
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Fears of Marine Le Pen winning this year’s French presidential election may have receded but investors should be hoping that her loss will be to frontrunner Emmanuel Macron — and not to former favourite François Fillon.
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The revival of banks using securitization to free up regulatory capital could open new possibilities for accelerating the financing of a greener economy, as a ground-breaking deal demonstrated this week, write Jon Hay and David Bell.
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Italy drew a more than a twice oversubscribed book on Tuesday and priced well inside guidance as it brought its second syndication of the year, a €3bn May 2028 inflation-linked BTP.
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Italy has mandated banks for its second syndication of the year, after a month in which its spread to closest peer Spain has tightened.
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Cassa Depositi e Prestiti has sold €300m and €150m notes late in February, despite dealers reporting an overall lack of MTNs in the market.
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A trio of eurozone government borrowers are rumoured to be mulling deals in the coming weeks, with conditions at the long end in euros looking stronger than earlier in the year.
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Spain added another entry to its growing book of blockbuster trades this week, using a novel early-bird feature to help drum up demand for its traditional 10 year annual opener. The deal came as Italy’s spread over Spain widened, despite a court ruling that analysts said should be positive for political stability in Italy in the near term.
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US President-elect Donald Trump left market participants dumbfounded by saying that the dollar is too strong just a few days before his inauguration on Friday — a position he won after a campaign promising infrastructure spending and tax cuts. But while Trump’s ability to disrupt markets is likely to be a feature of the next four years, the start of an unwinding of the ‘Trump trade’ could help public sector borrowers bring 10 year deals to a red hot dollar market, writes Craig McGlashan.
