BTP Futura: placement results
July 16, 2020
The placement of the BTP Futura, the new government bond proposed by the Treasury Department and dedicated exclusively to retail savers to finance the post-COVID recovery, ended on Friday 10 July.
"The Treasury closed the issuance of the new BTP just above 6.13 billion euros, against an initial demand estimated at around 10 billion and decidedly far from the 22.3 billion collection of BTP Italia in May," said Massimiliano Schena, CIO of Symphonia SGR.
According to Mr. Schena, "some elements have weighed on the lukewarm response of savers, primarily the minimum coupon rates without a significant premium compared to ten-year BTPs." Also, "the structure with six-monthly nominal coupons calculated based on pre-established and increasing rates over time, is probably more difficult to understand than fixed coupon security." He concluded, "add the longer maturity and the low liquidity that the BTP Futura will have on the secondary market since it is an issue reserved for the retail public only."
The series of definitive annual coupon rates paid on a half-yearly basis, equal to 1.15% for the first four years, 1.30% is confirmed for the following three years and 1.45% for the remaining three years.
Fabrizio Tesseri, head of the Treasury Department said: "We will certainly evaluate a new issue, a further issue of BTP Futura during the year. It is a hypothesis under study… As always, we will stick to the information that comes to us from the market also for the definition of the maturity and distribution of the coupons for the possible next issue… We are extremely satisfied with the outcome of the BTP Futura…It is the first issue of new securities, with a very long maturity, 10 years, which is unusual for the retail market. Total funding leaves us extremely satisfied and exceeds our central expectations for this first issue. "
Issue — Italy, BTP Futura 14jul2030, EUR
Country of riskItaly
Redemption (put/call option)
М/S&P/F— / — / —
Company — Italy