Italy

Italian equities bankers wondering what deals to bring from a country where the political situation is a constant threat to smooth issuance have been inspired by the recent UK listing of a luxury retailer. Sam Kerr reports.

Commerzbank, Jyske Bank and UBI Banca all issued €500m senior non-preferred bonds with five year maturities on Thursday. But Jyske opted for a more flexible and efficient note, callable four years after its issuance date.

Investors piled into deals for Spain and Italy on Wednesday despite the miniscule yields on offer, as the spectre of further easing of monetary policy looms large over the market.

Italy has surprised the market by hitting screens with a new 20 year euro benchmark trade while it is facing disciplinary action from the European Union for having excessive debt.

Investors are being forced towards riskier instruments for better returns, with safer assets looking expensive.

Italy’s parliament stunned the capital markets this week when it waved through a radical motion to explore issuing securities that resemble a parallel currency to the euro, in a development that has been met with almost universal derision. Frank Jackman, Lewis McLellan and Mike Turner report.

The European Central Bank’s (ECB) is expected to announce new policies on Thursday which, according to a fixed income strategist, will be positive for financial institution credits.

Financial institution issuers surprised market participants with no deals in the euro market on Monday after a busy period of roadshows. And as the week moves towards the European Central Bank's announcements on Thursday, issuance conditions might not improve.

Enel has completed its exchange offer of new hybrid bonds for old. The process began with a new issue of €300m of 61 year non-call six hybrids, which were priced last week to yield 3.625%.

Thursday’s corporate bond new issue action in Europe confirmed the picture presented on Wednesday: that investors were determined not to let macroeconomic issues bother them, and were piling into new issues. The day was less blemished than the previous one had been by volatility, enabling issuers to get some very tight spreads.

Italian companies planning to launch IPOs in the autumn are keeping a close eye on political developments in Italy. Their ability to sell shares relies as much on political stability as their own financials.

US fund manager BlackRock has pulled the plug on a rescue deal for ailing Italian bank Carige, setting the stage for a difficult political argument over whether to approve yet another costly government bailout.