Italy

Italy and the European Union will reboot the euro public sector bond market on Wednesday after announcing syndications of new 10 and 15 year bonds, respectively. The deals will come ahead of the European Central Bank’s meeting on Thursday, in which it is widely expected to increase the size of its Pandemic Emergency Purchase Programme (Pepp).

The reopening of Italian equity capital markets gathered pace on Monday night with two block trades with sellers across Europe expected to take advantage of the market conditions with further trades

The supervisory authority for Italian insurance companies (Ivass) has urged Cattolica Assicurazioni to raise €500m of capital before the autumn, having become concerned about a decline in the company's solvency ratios amid Covid-19.

The European Commission has published its proposal for an EU recovery fund. Next Generation EU, as it has been dubbed, has impressed onlookers with promises of €500bn of grants and a further €250bn of loans for countries affected by the coronavirus pandemic.

The European Central Bank said this week that Covid-19 could hamper some banks from meeting their targets for the minimum requirements for own funds and eligible liabilities (MREL), given the likelihood of credit rating downgrades and dislocation in the funding markets.

Investors welcomed a €781m trade in Italian payments firm Nexi on Tuesday evening after three of the sellers from the firm’s IPO took advantage of a recent rally in the share price to cut some of their stake.

Mediobanca frontloaded regulatory issuance and completed its funding plan before the coronavirus crisis struck. While its corporate loan book has increased, deposit inflows have also improved which means the bank is in no hurry to return to the public market according to head of group treasury, Carlo Masini, and head of funding, Paolo Labbozzetta.

A series of comeback trades has established firm demand for every debt class in the bank bond market. With credit spreads moving another leg tighter this week, issuers must now consider whether they have a precious opportunity to wheel out their riskiest transactions with the coronavirus pandemic still threatening society and capital markets. Tyler Davies reports.

Italy completed the sale a five year BTP Italia on Thursday for a record breaking size of €22.297bn to finance measures related to the Covid-19 pandemic. Demand for the product was boosted by the Franco-German EU recovery fund proposal.

Bank balance sheets are set to expand and Intesa's will be no exception. It will mean an an increased reliance on central bank funding. But apart from this, the Italian bank's mix of funding is likely to remain unchanged from February with the emphasis on regulatory capital. But as Alessandro Lolli, head of group treasury and finance told GlobalCapital, the bank has great flexibility in navigating its capital raising during the pandemic.

ABN Amro has ended a three week hiatus in the euro non-preferred senior market, launching a new deal on the back of a strong rally for bank credit spreads.

Intesa Sanpaolo became the first Italian bank to raise funding during the coronavirus pandemic this week. It offered a healthy premium for its five year senior deal, but the bonds have performed very well in the secondary market.