Italy

Sub-investment grade Italian lenders Banco BPM and Illimity Bank were well-supported in the euro bond market on Thursday, as investors showed they were more than happy to look at riskier names in their search for yield.

The resignation of Jean Pierre Mustier as group CEO on Monday night has laid bare deep fissures between the senior management of UniCredit, which has been focused on serving the interests of shareholders, and members of its board, which want to reposition the bank as a servant of the Italian economy.

Italian SME lender Illimity Bank is getting ready to sell its first senior bond by asking investors what sort of a price they would want to pay for the single B rated paper.

Banca Monte dei Paschi di Siena found plenty of demand for a new senior bond in the euro market on Tuesday, aided by growing speculation about the possibility of a merger with UniCredit.

Jean Pierre Mustier will retire as CEO of UniCredit in April, the bank announced this evening, as the board no longer agrees with his strategy. The change could mean UniCredit pivots towards Italian priorities and political influence.

Enel is planning €10bn of extra renewable energy investment in Europe, as a result of the support it hopes to get from the European Union’s €750bn recovery fund. But it believes the EU should refine its aid to subsidise sustainable finance more directly.

The European Central Bank has warned that some banks face a sharp spike in the cost of their bond funding, as the economic fallout from the coronavirus pandemic begins to translate into credit rating downgrades.

Small transactions reached big audiences in the financial institutions bond market this week, as investors realised they would need to consider buying sub-benchmark supply in order to make the most of a dwindling deal pipeline. Tyler Davies and Frank Jackman report.

Italy made a strong return to the dollar market on Tuesday with a deal over three times covered, which came following the conclusion of the sovereign’s second BTP Futura bond sale at the end of last week.

Italy’s BPER Banca was more than three times subscribed for a small tier two deal on Wednesday, as sub-benchmark transactions prove more popular than usual in the euro market.

Dollars was the flavour of the day for public sector borrowers on Tuesday as three issuers headed to the currency, raising a combined $12bn. Two more SSAs will follow with dollar deals on Wednesday.

Mediobanca was swamped with orders for a small tier two on Monday, as investors welcomed a rare opportunity to gain subordinated exposure to the Italian bank. Its deal was further supported by another positive development in the race to roll out a vaccine for Covid-19.