Italy

LCH RepoClear has raised its margin on several Italian government debt securities, but the market reaction has so far been muted, according to analysts.

Banco Popolare di Milano (BPM) attracted a bit more demand for a covered bond it issued this week than the previous two Italian deals, as the relative value compared to Italian government bonds was more attractive.

Italian electricity network operator Terna sold its first green bond on Monday and was rewarded with an order book that was more than 5.5 times oversubscribed.

Investors are upbeat about the prospects for Italian government bonds, believing that “market forces” will act as buffers to the effects of exuberant populist government policy. The sovereign had an auction of medium to long term debt this week that was well supported.

National Bank of Greece (NBG) won an investment grade covered bond rating this week, showing the way for European Central Bank (ECB) repo eligibility to other Greek banks. Along with a more stable fiscal and political backdrop and an imminent exit from its bail-out programme, Greek covered bonds have a good chance of outperforming Italian versions.

Three covered bond deals issued by Italian banks in recent days have elicited a mixed reaction from investors, particularly with respect to their value compated to senior unsecured debt.

Investors are upbeat about the prospects for Italian government bonds, believing that “market forces” will act as buffers to the effects of exuberant populist government policy. The sovereign should be supported at the long end during an auction this week, said some But in the core of the eurozone core, some investors are looking to keep things short.

BPER Banca had slightly more success than compatriot Mediobanca on Tuesday with a defensively priced €500m five year Obbligazioni Bancarie Garantite.

Italy’s Atlantia has refinanced an acquisition bridge facility with a €1.75bn five year term loan that was priced well below where the company sold 10 year bonds this time last year.

After a long hiatus, the Italian financial institution bond market exploded into life with week with two covered bonds and one debut unsecured transaction. Though demand was clearly more nuanced for the second covered bond, bankers were hopeful others would soon follow. Bill Thornhill and Jasper Cox report.

Mediobanca followed Intesa into the Obbligazioni Bancarie Garantite (OBG) market on Thursday and, despite coming with an easier to sell shorter maturity, demand was down by almost two-thirds compared to the earlier deal. Even so, bankers have not ruled out the possibility that one or two Italian banks could soon follow.

Vittoria Assicurazioni and P&V Assurances went ahead with very similar debut deals on Wednesday. But the trades enjoyed contrasting levels of success, with Vittoria the only one able to attract a substantial amount of oversubscription.