Italy

Cassa Depositi e Prestiti sold its first syndicated bond in over two years on Wednesday, returning to capital markets at a time when Italy’s political future looks the rosiest it has for months.

All the action in the SSA bond markets switched to euros on Wednesday morning with the US Federal Reserve's imminent decision on interest rates quieting the dollar market.

A trio of euro borrowers launched trades and a fourth picked banks on Tuesday in a market buoyed by a perceived renewal of European political unity following welcome results in elections in France and Italy at the weekend.

Nuovo Transporto Viaggiatori ran a four day roadshow for its first bond this week, as the market welcomed a €4bn deal pipeline.

UniCredit was looking to extend its global reach with a new dollar tier two on Monday, following last week’s ‘big shock’ for the market when all of Banco Popular’s tier two debt was effectively written down.

Rating: Baa2/BBB-/BBB

Public sector issuers from the eurozone periphery this week drew big books on deals that later tightened in secondary trading, as expectations that Italy could be added to the long list of European elections this year failed to deter investors.

A pair of eurozone periphery SSAs are tackling opposite ends of the euro curve this week. Italy will launch a 30 year benchmark on Wednesday, while a Spanish agency drew a doubly subscribed book for a three year.

UniCredit mandated banks to arrange its return to the dollar market in tier two this week, as the Italian bank considers a global approach to tackling its regulatory capital requirements.

The European Commission and the Italian government have reached an agreement in principle to grant Monte dei Paschi di Siena (MPS) a “precautionary recapitalisation”, clearing the way for the Italian government to inject public funds into the troubled Italian bank.

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.

Intesa Sanpaolo was unable to tighten pricing for its barely subscribed €1bn 10 year Obbligazioni Bancarie Garantite on Wednesday as mounting political risk in Italy caused a distinct change in sentiment.