Italy
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Public sector borrowers are set to enjoy yet more enviable funding conditions in euros, with central banks on an even more dovish path than before. At least one benchmark is in the pipeline for next week, while this week a core eurozone issuer sold its largest ever deal. -
The European Central Bank struck a decidedly dovish tone at its meeting on Thursday, meaning there were no nasty surprises for SSAs planning bond issues in the coming days. A French agency is on screens for a deal in dollars this Friday, while euro and dollar benchmarks are slated for next week.
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The common eurozone sovereign bond keeps rearing its head as a supposed solution to the monetary union’s problems.
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Conditions in the primary market have been nothing short of remarkable towards the end of February, with cash-rich investors chasing down new issues and letting banks get away without paying premiums. But FIG bankers say that there is one section of the market that is unlikely to be allowed to join in the party: Italy’s second tier banks. Tyler Davies reports.
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Covered bonds issued by Intesa Sanpaolo, Axa Bank and Aktia on Tuesday “flew out the door”, according to leads, with the depth and breadth of demand surpassing expectations. The superb conditions may not last, but exuberance is expected to prevail for now.
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UBI Banca has given financial institutions bond investors one of their first opportunities to pick up high yielding product in the euro market this year, with the Italian lender opening books on a new tier two on Monday.
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Unione di Banche Italiane issued the most heavily subscribed Obbligazioni Bancarie Garantite since January 2013, showing that, despite pricing over 100bp tighter than Italian government bonds, it offered value to some investors. Demand was probably boosted by an improvement in sentiment that followed comments from the European Central Bank suggesting a new stimulus package is in the offing.
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Italian auto finance bank FCA Bank found the feelgood factor in full effect on Friday as market participants suggested it priced a new three year deal more than 40bp tighter than if it had sold the same deal at the start of the year.
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Troubled Italian construction company Astaldi announced on Thursday that it had an offer from rival firm Salini Impregilo to inject €225m of new capital, take over control of the firm, and convert unsecured creditors, including high yield bondholders, into shareholders of the group.
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Record breaking Italian football club Juventus made its debut in the corporate bond market on Wednesday. It used the Agnelli family’s involvement in the ownership and running of the club for nearly a century to market the bond, but Italian football clubs do not have a great financial track record, writes Nigel Owen.
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Italy’s UniCredit was able to raise €1bn of new tier two capital without having to pay a large premium on Wednesday, adding to recent evidence that the subordinated debt market is in rude health.
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