The BTP Italia are back, government bonds created in 2012 and intended for small private savers. Starting from Monday 15 May and until Thursday 18 May, the next issue of the bond indexed to the inflation rate of Italy will take place, which once again will have a duration of 6 years and six-monthly coupons indexed to the Foi.
BTP ITALIA: WHAT THEY ARE AND HOW THEY WORK
Btp Italia are government bonds indexed to inflation and created in order to attract the investments of small savers and retail investors who will be able to take advantage of the greater protection against the increase in prices thanks to coupons that offer a guaranteed minimum annual real rate, paid every six months together with the capital appreciation for inflation for the semester. In the event of deflation, the coupons are calculated on the nominal capital invested, and the protection "covers" not only the principal amount, but also the interest.
Unlike other instruments of the same type, their issuance is not carried out through the classic auction called by the Treasury, but takes place through the MOT platform of Borsa Italiana, a change that since the time of the first issue, which took place in 2012, has contributed significantly to the success of this instrument. The reason is soon to be said. Using this channel, the subscription of Btp Italia can be done not only in the bank, but also directly through any home banking enabled for trading functions.
BTP ITALIA: GENERAL FEATURES
As far as the characteristics of these securities are concerned, they are a medium-term investment (the duration is four or six years) with a remuneration in line with the cost of living.
Speaking of the eleventh issue, the coupons will be half-yearly indexed to the Foi. In addition, payment will be made for the recovery of the inflation accrued in the reference six months, a single repayment at maturity and, for those who hold the security until its natural maturity, there will also be a loyalty bonus available at the time of repayment.
BTP ITALIA: DATES AND RECIPIENTS
The new securities will be placed on the market in two phases:
- Phase One, 15 – 17 May: the first phase will be dedicated to individual and similar savers. Communication of any early closure on the second placement day (May 16) will be given at the end of the first day (May 15) or by 13 pm on the same second day. In the event of early closure on the third day (May 17), this will take place no earlier than 14 pm and the relative communication will be made at the end of the previous day (May 16). The minimum denomination purchasable will be 1.000 euros.
- Phase two, 18 May: the second phase will instead take place from 9 to 11 on 18 May and will concern only institutional investors. For the latter, in the event that the orders collected exceed the quantity that the MEF intends to offer, Borsa Italiana will proceed to apply an allotment mechanism. The minimum denomination purchasable will be 100.000 euros.
BTP ITALIA: THE MINIMUM GUARANTEED RATE
Il guaranteed minimum annual real rate for this new issue it was fixed by the Treasury at 0,45%. However, the Treasury underlines that: "for small savers and other similar customers, no maximum limit will be applied, ensuring complete satisfaction of the orders, as in all previous issues".
BTP ITALIA: DETAILS ON THE 11TH ISSUE
Here is a summary of the Main characteristics of the title:
- Duration: 6 years
- Guaranteed minimum real annual rate
- Six-monthly coupons calculated on the revalued capital
- Immediate inflation recovery thanks to capital appreciation paid every six months
- Nominal capital guaranteed at maturity, even in the event of deflation
- Loyalty bonus for those who purchase the issue in the First Phase of the placement and keep the security until maturity, reserved only for individual savers and other similar investors.
(Last updated on Friday 12 May at 13,40pm)
