Italy

The Bank of Italy will require Banca Monte dei Paschi di Siena to maintain higher capital buffers from next year, after finding that it has become more complex and interconnected within the financial system.

Intesa Sanpaolo has become the first bank to use the proceeds of a green bond specifically to promote the development of a more circular economy — an issue that has been gaining increased attention from EU policymakers recently.

Italy printed an €800m 20 year inflation linked private placement on Thursday, satisfying demand from a single investor.

Enel is banking on saving money on its cost of debt by using sustainable finance, as it increases its use of sustainability-linked bonds. But it sees this as a halfway house, until the rating agencies properly reflect the company’s sustainability with better credit ratings.

After a day of global investor calls on Tuesday, Gas Networks Ireland and Radiotelevisione Italiana (Rai) launched sub-benchmark bonds on Wednesday morning. That followed a deal by Tamburi Investment Partners on Tuesday.

Intesa Sanpaolo and BNP Paribas hurried to make use of strong market conditions this week, building blowout order books for a pair of new senior deals in socially responsible formats.

Sanlorenzo, the Italian maker of luxury yachts, is hoping to succeed where its competitor Ferretti failed, having fixed a price range for its €192.5m IPO on the Borsa Italiana, which values the company at up eight times its forward Ebitda, people familiar with the matter said.

Italian banks have made the most of improving market conditions in 2019, with the average cost of five year senior debt having fallen by 40bp in the last six months, according to Bank of Italy data.

Credito Valtellinese (Creval) found strong demand for a €300m preferred senior bond on Tuesday, allowing it to push the pricing through its guidance range.

The positive market backdrop has driven smaller and less well-known bank issuers to come forward with rare new bond issues. But they are showing up just as investors pack up for the year, meaning they must work hard to lure enough demand, writes David Freitas.

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Investors have embraced the bonds of smaller European financial institutions this year, as they search for higher returns in an environment where interest rates are expected to remain low for a long time.