Italy

Unione di Banche Italiane was close to 14 times subscribed for a €400m additional tier one (AT1) in the euro market on Monday, as it capitalised on expectations of scarce supply in the asset class. The debut deal means the bank will become the fourth Italian issuer of AT1 capital.

Equity capital markets investors jumped at the chance to buy shares in Nexi, the Italian payments company, as it returned with its first transaction since IPO.

Crédit Agricole Italia marketed a dual-tranche bond with eight year and 25 year maturities. A steeper curve helped the longer tranche offer a higher pickup against the shorter bond, but investors still placed hefty orders on both tenors.

Moody’s and Standard & Poor’s have both placed Banca del Mezzogiorno-MedioCredito Centrale (MCC) on review for downgrade, after the Italian government confirmed it could use the state-owned bank to help recapitalise the struggling lender Banca Popolare di Bari.

The European Commission is talking with Italy about its proposed rescue of the troubled lender Banca Popolare di Bari, after the country passed a decree law this week spelling out plans for state intervention.

Italian football club Juventus has finished its €300m rights issue, which is intended to strengthen its balance sheet after an annual loss in 2018.

Italy and the EU provoked indignation this week, when Italy approved the use of public money to rescue Banca Popolare di Bari, a small regional lender faltering under the weight of bad loans. The decision looks likely to join a long list of cases when European Union rules designed to prevent government bank bail-outs have proved toothless, prompting market participants to think the EU has capitulated.

Banks and insurance companies are finally straining to turn capital markets greener. With many having realised there are savings to be had in issuing green senior bonds, the idea of them embracing sustainable capital instruments seems to be just around the corner. David Freitas reports

Italian superyacht maker Sanlorenzo was buoyant in trading on Tuesday after the company made its debut on the Borsa Italiana. However, the stock was under water by the close on Thursday, on very thin trading volumes.

Andrea Enria, chair of the European Central Bank’s supervisory board, has confirmed that eurozone banks will be able to include subordinated debt as part of their Pillar 2 capital requirements. The resulting 90bp improvement in common equity tier one (CET1) buffers could help to offset "unwarranted consequences" from the implementation of Basel III, he said.

Italy is planning to issue its inaugural green bond in the second half of 2020, joining Germany and Sweden, who are also looking to sell their debut bonds in the format next year.

Bank capital experts were taken aback this week after UniCredit suggested that it would use subordinated debt to count towards its Pillar 2 capital requirements — a development that, if copied, could lead to a surge in the supply of additional tier one (AT1) and tier two bonds. It could also help financial institutions offset the negative capital impact of Basel IV. Tyler Davies reports.