Italy

Banco BPM’s has amended its covered bond documentation to include loans affected by Italy’s mortgage moratorium in the asset coverage test (ACT), highlighting the challenge to transparency caused by discrepancies between issuer's programmes — even within the same country.

Iccrea Banca said on Tuesday that it had obtained the necessary regulatory approval to call two of its outstanding subordinated bonds, amid debate about the economic merits of leaving capital instruments outstanding.

Euro area banks have increased their reliance on preferred senior funding during the coronavirus crisis, fuelling speculation that some lenders may be expecting a softening of their minimum requirements for own funds and eligible liabilities (MREL).

Italy this week began the slow process of reopening its economy after months of strict lockdown. The country's equity bankers are busy preparing new deals, including IPOs, writes Sam Kerr.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, May 4. The source for secondary trading levels is ICE Data Services.

GVS, the Italian manufacturer of filters and components for among other groups, healthcare companies, is on track to list in Milan this summer, according to sources close to the deal. The company is likely to be the first major listing on the Italian exchange this year after Covid-19 froze the market.

The European Central Bank’s press conference on Thursday did not provide the headline fireworks that its last meeting did. The sombre tone caused “disappointment” among investors and a slight widening of peripheral spreads. SSA issuers were also left dissatisfied with the bank’s lack of support for the money markets.

The European Commission’s plans for a recovery fund will not be enough to prevent Italy’s public finances suffering a severe fiscal deterioration said Fitch, after the ratings agency downgraded the sovereign on Tuesday night.

Equities have made a stirring recovery since the record coronavirus sell-off in March. Corporates, looking to raise cash by any means necessary to survive the crisis and lower their risk, have taken advantage of the uplift, selling non-core equity holdings. Now, more are being urged to get in on the trade while it lasts, as there are fears that stock markets will plummet again if lockdowns or infections worsen with the pandemic far from over, writes Sam Kerr.

Italy was able to raise almost €6bn in auctions with ease on Wednesday following Tuesday night’s unexpected downgrade by Fitch, which leaves it just one notch above junk.

Fitch Ratings has lowered Italy’s credit rating one notch to BBB- on Tuesday night, making the move more than two months ahead of its scheduled review in July.

From Italian government bonds to fallen angels, nothing is junk unless the European Central Bank says so.