UPDATE 1-Italy sees strong 15-year BTP bond orders in sales of new year debt | Instant News


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MILAN, Jan 5 (Reuters) – Italy gets strong orders for its first syndicated bond issue in 2021, taking advantage of a solid market for eurozone borrowers as investors bet on aid from the European Central Bank and the European Union Recovery Fund.

The Ministry of Finance will sell its new 15-year BTP bonds worth 10 billion euros ($ 12 billion), which received orders for more than 105 billion euros, the highest demand for a 15-year syndicated issue in Italy.

This is the latest syndicated debt sale by state issuers including Ireland and Slovenia on Tuesday.

Luca Falco, Head of UniCredit Capital Markets, said the demand was “very satisfying” especially considering the problem occurred in the first days of this year.

“We see strong demand not only from Italy and the UK, but also from France and Germany,” he said, noting continued interest in Italian government bonds.

A Treasury source told Reuters that the attractiveness of bonds with maturities of 15 years is increasing, with investors seeing them as a good alternative to the coveted traditional 10-year bonds.

The Ministry of Finance’s issuance of bonds in 2020 totaled nearly 551 billion euros and expectations for 2021 are roughly in line with last year.

Sovereign borrowing costs have hovered around record lows since late summer, after the European Union approved funds to help the bloc recover and the ECB continued its asset purchase program.

The Ministry of Finance has set the yield for the new issue, due March 1, 2037, at 8 basis points above the 1.45% March 2036 BTP bond yield, below the initial guidance of around 13 basis points.

A value of 10 billion euros will be issued at a re-offer price of 99.409, equivalent to a gross annual yield of 0.992%.

The 2036 BTP bonds are Italy’s current 15-year benchmark, which Rome sold last February in a syndicated sale, raising orders by more than 50 billion euros.

Barclays Bank Ireland PLC, HSBC Continental Europe, Morgan Stanley Europe SE, Société Générale Inv. Banking and UniCredit are the joint main managers on this issue.

Reporting by Sara Rossi and Valentina Consiglio; editing by Giulia Segreti, Larry King and Emelia Sithole-Matarise

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