Italy

Telecom Italia and Vodafone have monetised part of their stakes in Inwit, the Italian wireless telecommunications infrastructure company, reopening the market for secondary share sales in Europe.

Analysts have praised UniCredit for taking a conservative approach to dealing with the coronavirus pandemic, after the Italian bank said on Wednesday that it would be making higher loan losses provisions in the first quarter than had been expected by the market.

Any concerns over Italy’s market access were vanquished on Tuesday when the sovereign received €110bn of orders for a dual tranche bond syndication, allowing it to raise €16bn as it makes inroads into its enlarged funding task in response to the coronavirus pandemic.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Tuesday, April 21. The source for secondary trading levels is ICE Data Services.

Italy mandated banks for a new five year to be sold alongside a tap of a September 2050 bond on Monday as it prepares to bolt on a bigger funding programme in order to fund its effort against the coronavirus pandemic. The sovereign will be joined by Luxembourg in the euro public sector bond market on Tuesday.

Nexi, the Italian payments company, has sold a debut €500m convertible bond overnight with a simultaneous delta equity placement to circumvent the three month short-selling ban that has been imposed in Italy as a result of the Covid-19 pandemic, according to market sources.

The European Central Bank has been buying Italian government paper well above the pace indicated by the capital key, but has still struggled to keep the beleaguered sovereign’s spread to Bunds in check.

Rating: —/BBB/BBB

Italian government bonds sold off sharply this week as worries grew over the sovereign’s debt sustainability after last week’s Eurogroup meeting left any form of debt mutualisation a highly unlikely prospect in the near term. The result is that Italy will have to rely more on support from the European Central Bank as it prepares to bolt on a much bigger borrowing programme in response to the coronavirus pandemic.

Bank of Italy officials said this week that the country’s most fragile financial institutions might struggle to cope with the economic impact of the coronavirus pandemic, raising the prospect of consolidation within the banking sector.

DCM officials have expressed surprise at the speed with which the market has adapted to working from home during the coronavirus pandemic, with issuers able to complete deals quickly and with little extra fuss.

Cassa Depositi e Prestiti pulled off a €1bn dual tranche Covid-19 response bond on Wednesday, capitalising on investors’ desire to deploy cash into coronavirus instruments to ride out a difficult market.