Italy

The Bank of Italy has said that it is concerned that the introduction of a new minimum requirement for own funds and eligible liabilities (MREL) could prove troublesome for the business operations of Italian banks, given their limited access to international bond markets.

There was little appetite for Italian inflation-linked debt this week, as Italy issued just over €2bn for its first BTP Italia sale since the sovereign’s bonds began selling off in May.

Equita, an Italian independent investment bank, has made two hires as it seeks to beef up its fixed income offering.

Investors took up just over €700m during the first two days of the first BTP Italia sale since the Italian bond market sell-off began in May, leaving the sovereign heading for a volume far less than its target of €6bn-€8bn, according to buy-side strategists.

Liberbank plans to issue its first covered bond, a transaction that will help refinance maturing debt borrowed under the European Central Bank's second Targeted Longer-Term Refinancing Operations (TLTRO). Many other banks face a similar problem, but seem to be ignoring the €399bn maturity wall that is fast approaching, writes Bill Thornhill.

Banca Carige’s planned tier two bond, which tides it over until it can raise equity, will present the FIG market with some unusual features. But the unfamiliar intervention from a branch of Italy’s deposit guarantee scheme appears not to have roused the European Commission’s attention with regard to state aid rules.

Continued uncertainty over the budget negotiations between the Italian government and the European Union is likely to delay Italian equity capital market deals in 2019, said bankers.

UniCredit’s CFO Mirko Bianchi has been on the road to meet North American investors after the bank released its third quarter results. From the end of the month, it expects to be prepared to issue its second ever senior non-preferred bond.

The Italian government’s refusal to make any concessions to the European Commission over its budget plans took investors by surprise this week, moving the 10 year BTP/Bund spread to its highest level since early 2013.

Banca Carige announced its capital recovery plan on Monday, relying on friends and family to help it keep going. Italian banks have agreed to support it with €320m though the interbank deposit protection fund (FITD), and it will also be looking to existing shareholders.

Italian construction firm Cooperativa Muratori e Cementisti di Ravenna officially announced it would miss the November 15 coupon payment of its 2023 bonds.

UniCredit has moved its target date for issuing instruments to meet its total loss absorbing capacity (TLAC) requirement from the end of this year to the end of March next year. Meanwhile, chief executive Jean Pierre Mustier is set to invest in the bank’s equity and additional tier one (AT1) notes.