Italy

Italian banks are taking advantage of excellent new issuance conditions, as investors re-establish their confidence in the country's new government. On Tuesday it was Banca Monte dei Paschi’s turn to do so with a euro-denominated preferred senior bond, one day after UniCredit and Intesa Sanpaolo.

RCF, the Italian manufacturer of high performance audio equipment, is likely to launch an IPO imminently, potentially as early as next week, adding to what is expected to be a strong finish to 2019 for Italian equity capital markets.

Italian luxury yacht maker Ferretti has announced its intention to float on the Milan Stock Exchange, over a decade after it was taken private by private equity funds.

UniCredit has become the first Italian bank to launch a new deal since a new government took office in the country. The €1.25bn tier two attracted €3bn of orders and was tightened more than expected, according to one of the leads.

Evidence is mounting that Enel’s $1.5bn sustainability-linked bond, issued last Thursday, introduced not just a new product, but a new market. In recent days the deal has generated intense interest, and Enel has committed to using the product extensively in future, writes Jon Hay.

Intesa Sanpaolo Bank Ireland this week printed a bond with what leads said was the lowest ever yield in Swiss francs from an Italian issuer. Following successful outings earlier this year in euros and yen, Italy’s largest banking group by assets turned to Swiss francs on Tuesday with a Sfr225m ($227.3m) five year senior trade that was also the first from an Italian borrower in the currency this year and the largest since the financial crisis.

Italy’s stockmarket has rallied since the formation of the new government to the extent that the FTSE MIB index is now into bull market territory this year, outperforming all its peers in Western Europe.

Italian bank bonds have performed very strongly as the country has prepared to welcome in a new government, but investors are still waiting for the sector to produce any new debt supply.

A new sustainable finance product, which has the potential for huge growth, was launched on Thursday when Enel, the Italian electricity and gas company, issued the first bond in which the interest rate can be altered during the term of the debt, based on the borrower’s sustainability performance.

CK Hutchison Holdings has launched a takeout deal into syndication to replace a €10.4bn bridge loan raised by Wind Tre, an Italian company it acquired last year.

Equity and bond markets were cheered on Thursday by the unexpected news that Italy could be close to having a new government, staving off the possibility of potentially disruptive elections later this year, write Sam Kerr and Tyler Davies.

The return of heightened market volatility this summer is leading to investors looking at defensive assets as fund managers consider how to ride out a possible turn in the economic cycle.