Italy

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.

Italy is a country of fast cars and has some some terrific companies for investors to invest in, but buyers must always keep in mind that political instability is as quintessentially Italian — and unpredictable — as an Alfa Romeo. It doesn't mean they cannot enjoy the ride, however.

Ferretti, the Italian manufacturer of luxury yachts, is still planning to lead the autumn Italian IPO pipeline, despite the increasing likelihood that the country’s coalition government could collapse after the resignation of the Prime Minister.

The European Central Bank has given Banca Carige the all-clear to try and carry out its latest plans to turn itself around. The ailing Italian lender said on Monday that its next step will be to ask its shareholders for their approval at a meeting next month.

An impressive rally in Italian risk assets has been completely overturned this week, as Italy descended into political chaos. Some market participants now fear a repeat of last year, when Italian issuers were frozen out of debt and equity markets as the country’s government fought with the European Commission over its annual budget targets. Tyler Davies and Sam Kerr report.

Political chaos in Italy disguises the progress made turning around the country’s banking sector.