Italy
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Spreads on covered bonds from Italy’s weaker credits have shot skyward this week, with indicative bids in the worst affected names out by at least 25bp since the start of the year. The moves have followed renewed concerns over their non-performing loans. -
The Italian subordinated debt market has come under further pressure this week, with spreads shooting wider amid renewed concerns about banks’ high levels of non-performing loans.
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HeidelbergCement, the German building materials manufacturer, has done part of the financing for its acquisition of ItalCementi in the Schuldschein market, but insists it is not afraid of volatility in the bond market.
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Several major Italian ECM deals are set to move forward in the next few weeks. Saipem, the oilfield services company, will open subscription for its €3.5bn rights issue on Monday January 25. And Veneto Banca is set to announce in the next couple of weeks more detail of its €1bn capital increase and flotation, to be completed in April.
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Crédit Agricole and Intesa Sanpaolo required big premiums to reopen the euro and dollar additional tier one (AT1) markets this week, and bankers fear others will have to follow due to poor secondary liquidity in the product.
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A trio of Spanish issuers launched the first covered bonds of the year from southern Europe this week but, with peripheral spreads widening sharply, conditions are not conducive to further supply.
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Investors in the public high yield bond market have gone right off riskier structures such as payment-in-kind notes, only two months after they eagerly grabbed a €1.1bn PIK deal for ICBPI, one of the biggest of its kind.
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Telecom Italia brought the first telecoms bond deal of the year to the European market on Wednesday, tapping both high yield and investment grade investors.
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Portugal is limbering up for its first benchmark of the year in a week heavy with eurozone periphery sovereign issuance, including an auction where Italy’s three year yield nearly dipped below zero.
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The initial public offering of Ferrovie dello Stato Italiane, the Italian state-owned railway network, may take place this year, the country’s finance minister said on Tuesday.
