It was set at1,6% il guaranteed minimum interest rate for the new one BTP Italy which will be put on the market by the Treasury from next Monday. A level that strategists consider "in line with market quotations".
It is about the known Btp indexed to Italian inflation (FOI index, excluding tobacco – Consumer price index for blue and white-collar households, excluding tobacco), the 18th issued by the Italian government and the second this year.
Il new Btp Italia has a duration of 6 years (maturity November 22, 2022 and maturity November 22, 2028), with coupons paid every 6 months together with the capital revaluation due to inflation in the same semester.
The offer, as already known, will take place in two stages, the first reserved for retail savers, the second for professionals.
BTP Italia, is it worth it? Inflation prospects
The main question investors are asking now is about convenience of this new security and in particular, since it is linked to inflation, it is a question of predicting how the price trend will be in the 6 years of life of this security. In the comparison with the other Btp Italia on the market, this new one is perfectly in line: the real yield of the new Btp Italia, which expires in 2028, at 1,60% compares with the one which expires in October 2027 which has a real yield of 1,4% and with the one expiring in June 2030 which yields 1,8%. So the yield announced this morning “is perfectly in line with the market, within the range” observes a strategist.
But the real theme is the inflation expectations for 6 years of duration of this title.
“We currently have galloping inflation at a few-decade highs, but the outlook over these six years is mostly a decline from those peaks,” says an economist. “On the one hand, inflation could ease under the ax of the rate hikes by the European Central Bank. On the other hand, it could decrease due to the fact that consumers may want to slow down their purchases, seeing such high prices, thus forcing companies to lower prices while reducing their margins”.
New BTP Italia issue: yield
At this point it is a matter of seeing how much a return appropriate of this BTP Italy compared to a Nominal BTP, not indexed to inflation.
There is a nominal BTP on the market with a maturity similar to that of the new BTP Italia, the BTP 1/12/2028 which currently has a yield of 3,49% on the market. “Considering the minimum yield communicated this morning by the Treasury of 1,60%” observes a strategist, “the nominal BTP discounts an average annual inflation of 1,9%. We have to ask ourselves: will inflation remain at an annual average of this type during these six years of life of the BTP?”.
Lcurrent average inflation of this year up to September was 7%.
Average inflation in the last 12 months from October 2021 to September 2022 was 6,1%
But the average inflation for the year 2021 was equal to 1,9% and even the average inflation in 2020 was -0,1%, 0,6% in 2019 and in any case just above 1% since 2016.
When and how can Btp Italia be subscribed?
La first stage of the placement period, dedicated to individual savers and similar, will take place next year Monday 14 November to Wednesday 16 November 2022, unless closed early. The ISIN code of the security for this first phase is IT0005517187. The inflation index number calculated on the date of entitlement and settlement of the security is 113,41000, the MEF announced this morning.
For those who subscribe to the security in this phase and hold it until maturity (November 22, 2028), there is a loyalty bonus equal to 0,8% of the invested capital.
Il definitive rate it will be established at the opening of the fourth day of issue, on the morning of Thursday 17 November and may be confirmed or revised upwards with respect to that communicated today.
To subscribe to the BTP Italia, in addition to going to the bank or post office, remember that it is also possible to purchase it online through your home banking (usually with the trading function enabled).
The second phase, dedicated to institutional investors, will take place on Thursday 17 November from 10 to 12.
The issue will take place on the MOT (the Telematic Market of Bonds and Government Securities of Borsa Italiana) through Intesa Sanpaolo and UniCredit (Dealer of the transaction) and Banca Akros and Banca Sella Holding (Co-dealer of the transaction) from 14 to 17 November 2022. The settlement date of all executed purchase orders is unique and coincides with the accrual date.
