Italy

Investors have jumped at the chance to exchange a series of senior bonds issued by Banco IFIS for cash, with the Italian bank coming close to buying back the full €100m on offer.

Italy is preparing to make its highly anticipated return to the dollar market next year. The sovereign had planned to issue a dollar syndication in 2018, as first revealed by GlobalCapital, but postponed due to the volatility in the Italian bond market.

Rating: Baa3/BBB/BBB

Italy found strong demand for a surprise syndicated tap on Thursday — despite a fresh and steep sell-off across its curve throughout the day — proving the peripheral sovereign had access to the capital markets even during extremely difficult conditions.

UBI Banca is meeting investors to market its new sustainable bond framework in a non-deal roadshow. It could become the second Italian bank to issue a green bond, and the second to come out with any public unsecured trade since the country’s coalition government formed earlier this year.

Italy carried out a syndicated buyback alongside a reopening of its October 2021 issue on Thursday, despite a steep sell-off in the sovereign’s curve throughout the day.

Speculation is rife in the government bond markets that the European Central Bank will deploy special monetary policy to support Italian BTPs. Aside from being a ridiculous idea — Italy has got itself into this mess with its own budget proposals, not because it is in a financial crisis — such support brings with it yet more rules that Italy would have to abide by in order to receive the help.

The Italian Interbank Deposit Protection Fund (FITD) has underwritten €320m of Banca Carige’s tier two capital notes. Private investors are now invited to subscribe to the issue, which allows the Italian lender to meet its capital targets.

UniCredit paid a hefty price for hitting the market this week, but it will also stand to reap the rewards.

Italy’s 10 year yield dropped to its lowest level in almost two months this week, after the country’s top government officials suggested they could target a budget deficit as low as 2% in 2019.

UniCredit found a single investor willing to buy $3bn of its non-preferred senior notes at a coupon rate of 7.83% this week, as the bank pulled out all the stops in an effort to comply with its interim target for total loss-absorbing capacity (TLAC).

Populist parties such as Italy’s Five Star Movement are winning elections on platforms of transparency, reducing waste and removing corruption. But the biggest waste of money in Italy this year has been the party’s futile budget standoff.