Italy

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.

Rating: Baa3/BBB/BBB

The branding may be on the way out, but there are plenty of reasons to be encouraged about the potential for real progress in the next phase of the Capital Markets Union.

After making a strong return to the dollar bond market for the first time since 2010, Italy aims to become a frequent issuer in the currency once again, according to the sovereign’s funding head.

Lesser-known Italian financial institutions have moved to the front of the pipeline in the financial institutions bond market, as larger and more frequent funders begin slipping into blackout periods ahead of reporting third quarter earnings.

Italy delighted investors with its first dollar bond in almost a decade on Wednesday, as it raised $7bn across three tranches. However, bankers away from the deal said the sovereign paid up over its domestic cost of funding — something it had originally planned to avoid.