Italy

Asset quality took a turn for the worse in 2015 for Italy’s banks, whose future remains unclear despite newly approved plans for a state-backed bad bank.

Gruppo Statuto’s €59m San Basilio Property minibond has begun trading on the Vienna Stock Exchange.

Italian non-performing loan securitizations will now come with a government guarantee, after months of negotiations between the state and the European Commission resulted in a rather rosy outcome for the country’s banks this week.

Zenit Sgr, the Milan-based investment fund, is working on the underwriting of a minibond by a listed Italian media company that could issue as early as February, sources have said.

Established covered bond investors are often sceptical about conditional pass through deals. The structure allows the maturity of their investments to be extended, perhaps by decades. But they could be safer than long dated bullet deals.

As Monte dei Paschi di Siena’s shares gyrated last week, losing up to 34% of their value, the bank received a high honour, for a second year running — top primary dealer for Italian sovereign bonds.

Non-performing loan ratios in all major European banking systems either improved or remained level in 2015, except for Italy’s.

The treatment of senior unsecured debt in Germany and Italy has led to the downgrading of a number of banks' ratings by Moody's.

Trading in Saipem, the Italian oil and gas engineering company, had to be suspended on Monday, the first day of the firm’s €3.5bn rights issue, due to heightened volatility in the stock.

Shares in Saipem, the Italian oil and gas engineering company, fell to a new 14 year low today, after it released the pricing details of its €3.5bn rights issue at midnight on Thursday.

UniCredit has offered to buy back up to €1.8bn of subordinated bonds mainly held by retail investors for the third time this year, as it looks to clean up its capital structure.

The economies of Italy and China do not appear to have much in common. Italy’s government would welcome a GDP growth rate of 1%, while China expands at less than 7% and investors take flight. One is a sclerotic, decaying Western country, the other is a dynamic Asian tiger. Such is the conventional wisdom.