Italy

On Wednesday, A2A became the second Italian utility this week to sell a 10 year new issue. The company achieved the current benchmark low single digit new issue premium for its €300m deal.

Italy’s banks and politicians are worried about the European Central Bank’s non-performing loan crackdown. They are right to worry — but the answer is bankruptcy reform.

Italian gas utility Snam repeated the new issue-and-tender strategy it used in 2016 as it printed its third ever 10 year bond on Tuesday. The company was not able to replicate the zero new issue premium it achieved 12 months ago, but did still price at a very tight spread.

On Tuesday, Iren, the electricity and gas distributor, announced a new benchmark green bond alongside a tender offer for some of its outstanding bonds.

Banca IFIS became the fourth Italian bank to open books on a new public bond offering this October, with the country’s financial institutions returning to the capital markets ahead of the introduction of non-preferred senior debt in Italy.

On Thursday, the European corporate bond markets had two new telecoms deals to consider. Iliad, and unrated French issuer, priced a seven year deal, while Telecom Italia opted for longer.

Italian auto finance bank FCA Bank on Wednesday opted to go for a short maturity for the lowest cost of funding for its latest bond issue. A €800m three year deal achieved just that, pricing with barely any new issue premium.

After three days without a deal, the euro corporate bond market reopened with nearly €2bn of new issuance from three different issuers. The auto finance lender, FCA Bank, issued a three year deal, French electrical equipment manufacturer, Legrand, sold six year bonds, while French toll road operator, Cofiroute offered a 10 year transaction.

Iccrea Banca sold its second euro senior deal of 2017 on Wednesday, with Italian banks piling back into the primary market and eclipsing last year’s issuance volumes.

The buy-side is slowly removing European duration from portfolios in anticipation of the European Central Bank cutting its asset purchase programme, according to an investment director. Meanwhile, new cash flowing into the eurozone periphery is likely to go to Italy over Spain while uncertainty lingers over Catalonia’s future.

Despite the momentum in Europe’s equity capital markets showing little sign of stalling, with a new wave of deals this week across a number of sectors, two of the year’s most high profile IPOs have traded down in the aftermarket.

Italy’s Banca IFIS will look to sell new tier two bonds following a roadshow this week, as Banca Carige plans to become the latest Italian bank to find a solution for its financial difficulties.