They even talk about it at the bar. Immediately after the championship ranking and the last episode of Master Chef. The Btp Value Italians liked it, so much so that it became a topic of conversation, as its advertising teaches, which even promises you a cruise if you sign up for it.
Sign of the times. It was said that the Italians did not want to invest and hold the liquidity in current accounts. And yet here they are, burned by over a year of heavy inflation which has eaten up part of the value of their assets, the so-called bot people, but in one more advanced version, they have learned to invest, to do arbitrage, to navigate the various deadlines, sitting comfortably in front of their home banking workstation.
Not too long, a return that is unlikely to be seen again in these years, a rewarding comparison also compared to the assets on the market, also thanks to the loyalty bonus which also inspires a certain sense of participation in the project. Here are some of the secrets of success of the latest product offered by the Italian state: the BTP Value 2024-2030.
New records: 18,31 billion raised, 656.369 contracts
The placement of the vehicle ended at 13pm today third issue of the BTP Value a six years and the Ministry of Economy and Finance toasts by recording a new record of orders collected twigs retail audience to whom the title was dedicated: 18,31 billion, also exceeding the previous record set by the first issue last June (18,2 billion euros). The second issue of October 2023, which closed with 17,2 billion. “It's about” said the Tesoro, "of the highest result ever in terms of value subscribed, but also in number of contracts registered" equal to 656.369 units.
For this new issue of the BTP Valore, savers will be paid coupons every three months, with a rate of 3,25% for the first three and 4% from the fourth onwards (rates confirmed compared to the announcement of 23 February) to which is added a possible loyalty bonus of 0,7% reserved for those who purchase it during the days of placement and holds it until maturity.
A new typology of Bot People: the evolved model
It is known that Italians have long been recognized as the bot people, as loyal subscribers to the shorter maturities of the range proposed by the Treasury. Of course, in the 90s, the Bots had double-digit returns (in the face of equally high inflation), but Aunt Jole, who had invested a few lira (the current currency at the time), then couldn't sleep at night out of fear that they would no longer give them back to him in times when the default of the Italian state was not a fantasy economy scenario.
Things have changed. Even for the better, net of a public debt that continues to grow and continues to hold the podium in the world in terms of consistency. But over the years the Italian economy and state have gained a certain respect among international investors above all. As evidenced by the indicator par excellence, lo spread which is now hovering around 150 basis points, a far cry from the crisis of even just 2011 when it approached 500 bps.
At this point, between eroding inflation and an attractive offer, the Bot people have launched themselves, showing that they are also advanced and well capable of using home banking.
The latest version of the BTP value offered on Motor platform (the electronic market for bonds and government securities of the Italian Stock Exchange) has seen much larger orders than those of Aunt Jole. Already on the first day of the offer, last Monday 26 February, an order arrived from 3 million euros and the following day, at 15.10 pm, someone placed an order on the Mot 10 million euro.
Aside from the two large orders, it appears that the average contract was around 30.000 euros, higher than both the 28.165 in October and the 28.648 in June.
Taking that 10 million order as a reference, the investment will yield approximately 370 thousand euros gross per year, 352 thousand net. A good performance even if it does not meet the promises of dealer to be able to take a cruise: to have a return that pays for the ticket, let's say the average value of 3000 euros, it is therefore necessary to invest 100.000 euros, definitely within the reach of a more than advanced investor.
Choices on the market and arbitrage
But the "evolved model" Bot people have also shown that they know how to juggle the various deadlines offered on the market. After having also fully subscribed to the two similar issues placed by the Mef last year (over 36 billion in total), as soon as the new issue was announced at the end of January Bot people have sold the old one to make room for the new, also gaining in terms of price. Here's how.
As is known, after the end of the placement at the price of 100, the BTP Valore enters normal market trading. The BTP value placed at 100 in October, at the end of January when the new one was announced, was quoted at 103,65 and there were those who sold it (so much so that the price of that security has now fallen to 102,50 ) to move to the new one, with the added advantage of gaining the added value. Is called arbitrage: something that Aunt Jole probably didn't even know existed.
What did Bot people see in this new product?
The nightmare that the Bot people have experienced in recent months and which has taken the form of inflation is now being put to rest, at least for a few years. If the cost of living is higher than the bond yields then, despite the coupons, there will be a “real ultimate loss”. Currently annual inflation is around 6%, therefore above the yields of the BTP Valore.
But everyone in the bar now knows that inflation estimates for the next few months are for a decline and that between 2024 and 2025 it is expected that, thanks to the monetary policies of the ECB, it could return to around 2,5%-2 %. So here it is profitability convenience of the BTP Value.
This new issue will also have a final extra loyalty bonus, which this time will be equal to 0,7% of the invested capital (it was 0,5% for the first and second tranche) for those who purchase the security during the trading days. placement and will keep it in the portfolio without interruption until maturity. To simplify the recognition of those entitled to the extra final loyalty bonus of 0,7%, the BTP Valore will be assigned a "special" ISIN code and a regular ISIN code.
The MEF also recalls that the latest budget law excluded government bonds and other guaranteed financial products of the state, up to a maximum limit of 50 thousand euros in total, from the ISEE indicator. The BTP Valore, specifies the Mef, will be excluded from the economic-financial situation indicator, starting from 2025 with the completion of the implementation process of the measure which has been started and will conclude shortly with the issuing of amendments to the specific Prime Ministerial Decree.
Performance compared to other securities
But the comparison with other products offered by the state is also rewarding. The current Btp Valore offers a double coupon: 3,25% for the first 3 years and 4% for the next three to which is added the loyalty bonus of 0,7% for those who hold the security until maturity. The final calculation gives an average return of 3,77% gross for the entire six-year period.
Compared to other comparable titles of equal deadline it's about a increase of approximately 30 basis points. It is even slightly lower than the yield of the 10-year BTP. We see.
Il Btp expiring March 1, 2030 (coupon 1,75%) or with the Btp 15 June (coupon 1,85%) offer a yield of around 3,45% and 3,53% respectively. On an investment of 10 thousand euros it corresponds to 25-30 euros more than the coupon of the traditional BTP of the same duration. The BTP Italy with a yield linked to inflation expiring in June 2030 and a minimum guaranteed coupon of 0,8%, it offers a yield at the current price of around 3,42%.
If anything, a good alternative to the BTP value could still be the ones bank deposit accounts which usually extend up to five years. With the best proposal available on the market, says ComparaConti, for a deposit that cannot be released for five years, it is possible to have a constant gross interest rate of 4,75% for the entire duration of the deposit. However, it is also necessary to calculate a tax rate of 26% instead of the 12,5% of the BTP. In both there is then an annual stamp duty of 0,2% of the amount. Out of competition are the Poste Italiane vouchers which are unable to reach the BTP Valore performance quotas.
The next cartridges that the Treasury will fire
Anyone who hasn't been to this match needn't worry. The Treasury will also have a lot to do in the coming months to compensate for the monster figure of over 330 thousand euros of bonds maturing in 2024 alone. And therefore it will come to offer us other models of government bonds. Certainly, experts say, it will be offered to us again another BTP Value, in June and/or October. Regarding the BTP Italia, linked to inflation, there are a little more doubts, given that with consumer prices falling, it could be less attractive.
| Btp Value first issue (June 2023) | Btp Value second issue (October 2023) | Btp Value third issue (February 2024) | |
|---|---|---|---|
| Duration | 4 years | 5 years | 6 years |
| Coupons | half-yearly | quarterly | quarterly |
| Formula step-up | 2 + 2 | 3 + 2 | 3 + 3 |
| Tasso guaranteed minimum | 3,25% for the first and second year; 4% for the third and fourth year | 4,10% for the first, second and third year; 4,5% for the fourth and fifth years | 3,25% for the first, second and third year; 4% for the fourth, fifth and sixth years |
| Tasso final | 3,25% for the first two years; 4% for the next two | 4,10% for the first three years, 4,5% for the next two | 3,25% for the first, second and third year; 4% for the fourth, fifth and sixth years |
| Loyalty reward | 0,5% | 0,5% | 0,7% |
| Collection | 18,14 billion | 17,2 billion | 18,31 billion |
| Orders | 654.575 contracts | 641.881 contracts | 656.369 contracts |
