Italy

Rating: Ba2/—

Italy won huge backing from investors as it placed its first BTP Italia trade since a poorly received deal in November 2018, which came during the peak of the volatility in the country’s bond market.

Newlat, the Italian food group, has extended bookbuilding on its IPO until October 24 and has shrunk the deal size, despite reports earlier this week that the deal was covered throughout its initial price range.

Banco BPM extended the run of recent Italian bank bond supply this week, launching a preferred senior bond. The deal was launched at 200bp over mid-swaps and did not offer a new issue premium to investors, according to a banker on the deal.

Credito Emiliano continued an Italian bank bond spree on Friday, choosing a quiet day to market a debut non-preferred senior bond. The deal comes one day after Banca del Mezzogiorno priced a social bond.

Weichei, the Chinese industrial conglomerate, has shocked equity capital markets by cancelling the IPO of Italian yacht maker Ferretti the morning after books had closed and banks were waiting to be given the go-ahead to start allocating shares.

The IPO of Ferretti, the Italian manufacturer of yachts and super yachts, is finally covered after a long and difficult book building process and investors have praised the willingness of the seller to be flexible on valuation to help the deal across the line.

BPCE and Banca Farmafactoring launched senior deals this week, with both issuers enjoying healthy receptions to their offerings. BPCE’s non-preferred mandate drew over €2.75bn of orders and the Italian issuer saw its preferred bond attract €850m at the spread level.

The Italian cabinet’s late night agreement on a draft budget for 2020 will drive investors to hold longer maturity BTPs, causing spreads to tighten ahead of a potential rating outlook upgrade next week, said analysts.

Ferretti, the luxury manufacturer of Italian yachts, has lowered its valuation expectations, and IPO range, for its listing on the Milan stock exchange as banks work to get the deal across the line.

UBI Banca launched a €500m non-preferred senior bond this week, supported by orders of €1.4bn at peak, but it had to pay a new issue premium, according to a FIG banker.

Enel, the Italian power and gas company that is the first, and only, issuer of bonds with sustainability-linked coupons, proved this week that the structure appeals to European green-minded investors, by raising €2.5bn at a spread several basis points tighter than it could have achieved with a normal bond. Jon Hay and Mike Turner report.