With rates on the rise, the Treasury decides to focus on long maturities and announces the syndicated placement of a new Btp to 20 years “in the near future” based on market conditions.
The novelty arrived on the afternoon of Monday 9 January through an official note.
The details of the new 20-year BTP
“The Ministry of Economy and Finance announces that it has entrusted Barclays Bank Ireland PLC, BNP Paribas, Citibank Europe Plc, Goldman Sachs Bank Europe SE and Intesa Sanpaolo SpA with the mandate for the syndicated placement of a new benchmark 20-year BTP – expiry 1 September 2043. The transaction will be effected in the near future, depending on market conditions."
The Treasury also specified that, precisely because of the launch of the new deadline, at the auction of 12 January for the issue of medium-long term government bonds, we read, no bonds of duration of more than 10 years.
The new twenty-year bond will cover a maturity date – that of 1 September 2023, as mentioned – which has so far remained "uncovered". To date, in fact, there is only one bond with a later maturity date, set for 1 September 2044. Two others have a maturity date of 2041: the first has a fixed coupon to be repaid in March, while the second will mature in September and is indexed to inflation in the euro area.
Based on analysts' expectations, the initial yield of this new bond should be around 4,5%
Auctions on Thursday 12 January
Thursday 12 January will be carried out the issue up to 7 billion euros of 3-year BTPs and 7-year BTPs. The settlement date is set for Monday 16 January.
Il Btp 3 Years will expire on 15 January 2026 and have a coupon of 3,50%, for an amount between 3 and 3,5 billion euro. The Btp to 7 years will expire on 15 December 2029, will have a coupon of 3,85%, for an amount between 3 and 3,5 billion euros.
