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FAQ

Questions

  1. How can you buy Government securities?
  2. Where can you find information about the features of Government securities?
  3. What are Bonds (BTP) linked to European Inflation?
  4. How does the Treasury issue Government bonds?
  5. What kinds of auction does the Treasury adopt?
  6. What is a syndicated group?
  7. Who are the Specialists in Government Bonds?
  8. When are Government bonds issued?
  9. Where are offering announcements of government bond auctions published?
  10. How much do BOTs and other Government securities yield?
  11. Where can you find historical data about Government bonds?
  12. Where can you find issuance prospectus of securities and CCT coupons?
  13. How are Government securities taxed?
  14. What bank commissions are applied to Government securities?
  15. What do Public Debt and outstanding Government bonds amount to?
  16. Where can you find information about the major aggregates of public finance?
  17. What are the Guidelines for Public Debt Management?
  18. What is accrued interest?
  19. What are exchange transactions?
  20. What is the coupon stripping?
  21. Are there Government bonds issued abroad?
  22. Is it possible to hold a printed Government bond?
  23. What does “secondary market” mean?
  24. Is there a Public Debt newsletter or mailing list?

Answers

How can you buy Government securities?

You can buy Government securities both through auctions and on the secondary market; in any case it is necessary to do so through your bank or an authorized financial intermediary.
Purchasing through auctions requires the investors to book the desired amount at least one day prior to the day of the auction. The latter is made known through the calendar.

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Where can you find information about the features of Government securities?

The features of Government bonds (BOTs, CTZs, CCTs, BTPs and BTP€i) issued on the domestic market are explained in detail in the files prepared for this purpose for each security and available in the Treasury securities section. 
The features of Government bonds (Commercial Paper, Medium Term Notes, Global bond) issued on the international market and the respective issuance programs are available in the International Funding Program section.

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What are Bonds (BTP) linked to European Inflation?

The inflation linked BTPs are Government Securities with 5, 10,15 and 30 year maturity. They are medium-long term and floating securities, because both the amount redeemed at maturity, and the semi-annual coupon are revaluated on the basis of the Euro zone inflation, measured by the Harmonized Index of Consumer Prices (HICP), excluding tobacco. For further details you can consult the specific file.

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How does the Treasury issue Government bonds?

Government bonds are issued through auction or through syndication. The most important issuance procedure on the domestic market is the auction. Syndication is mainly adopted for the placement on international financial markets.

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What kinds of auction does the Treasury adopt?

Placement through auction can follow two methods: competitive bidding (for BOTs) and marginal auction (for BTPs, CCTs and CTZs). Competitive bidding determines that bids are satisfied at the price posted, whereas the marginal auction determines that all the requests are allotted at the same price, the so-called marginal price. Only authorized dealer are allowed to participate to the auction.

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What is a syndicated group?

A syndicate is a group of banks which is given the mandate to place a specific amount of Government bonds that the Treasury wants to issue. The banks that participate to the syndication are mainly chosen among Specialists in Government bonds and have to ensure an efficient selling procedure and an adequate distribution of that bond.

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Who are the Specialists in Government Bonds?

Specialists in Government Bonds are those specific intermediaries who are market makers and have precise rights and obligations towards the Treasury. They have the commitment to subscribe Government bond auctions, to guarantee a constant liquidity in the secondary market and they also have the exclusive right to participate to the re-openings that follow the auctions, to the buy-back transactions and to the exchange offer auctions, as well as to be, all other things being equal, the preferential intermediaries to be addressed when forming a syndicate.

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When are Government bonds issued?

Government bonds are issued in accordance with the annual issuance calendar distributed by the Ministry of Economy and Finance. The calendar indicates the auction dates and the settlement dates with the distinction between short-term securities (BOTs and CTZs) and medium-long term ones (BTPs and CCTs). Besides, the quarterly issuance program specifies the financial features of the bonds that will be issued in the following quarter.

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Where are offering announcements of government bond auctions published?

You can find the offering announcements for each issuance directly on the home page of our website, in the Auctions of Government bonds section. They are available also on the following major financial networks: Bloomberg (index page MDTE), Reuters (index page TESOROITALIA) and Moneyline Telerate (index page 47710 – 47711).

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How much do BOTs and other Government securities yield?

The bond yield depends on the placement result. Auction results and placements through syndications are published on this website and in the major national newspapers.
You can also find an annual summary which contains key interest rates at issuance of Government securities and, in particular, those mentioned in the present laws, like the minimum and the maximum interest rates of 12 month BOTs.

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Where can you find historical data about Government bonds?

A section, called Historical Database has been set up inside Public Debt Statistics website. Historical series from 1980 up until the present have been compiled regarding: Government Debt Breakdown by Instruments, weighted average life of Government Debt, details on Government bond auctions (BOTs, CTZs, BTPs, CCTs).

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Where can you find issuance prospectus of securities and CCT coupons?

The issuance prospectus of government bonds are decrees published in the Official Gazette of the Republic of Italy. Some decrees, the most important, are also available in the “Laws and Regulations” section of this website.
CCT coupon values, indexed to the 6 month BOT yield, are periodically published in the Official Gazette.

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How are Government securities taxed?

The current tax regime on Government Bonds provides:
- for all taxpayers earning interest on Government bonds and running a business activity, that the interest is not subject to any tax at source or substitutive withdrawal and contributes, together with the profit and loss income items, to the determination of the total taxable income; - for all other subjects, that tax is collected on a lieu tax basis by the financial intermediaries, at a fixed rate of 12.5%. You apply the lieu tax both on the coupons and on the difference between redemption value and issue price; for CTZs and BOTs on the whole difference between redemption value and issue price.

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What bank commissions are applied to Government securities?

Commissions applied to final clients on short term securities (BOTs) are indicated in the decree for transparency in the government bond placement which establishes the maximum amount that banks can apply to their clientele at the subscription of the bond. Additionally, those commissions have to be exhibited in venues open to the public by exposing specific informative prospectus. For medium-long term bonds (BTPs, CCTs, CTZs) investors are not subject to the payment of any placement commission. In this case, in fact, the Treasury provides the Bank of Italy with commissions that will be attributed, entirely or partially, to the financial intermediaries taking part in the auction.

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What do Public Debt and outstanding Government bonds amount to?

The amount of Public Debt and of outstanding Government bonds, as well as the trend of the Public Debt /GDP ratio, is available on the home page of the website, http://www.dt.tesoro.it/en/debito_pubblico.html

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Where can you find information about the major aggregates of public finance?

The amount of Public Debt, as defined in article 104 of the Maastricht Treaty, is published monthly in the supplement to the Bank of Italy’s Statistical Bulletin “The Public Finances". The data is also published yearly on the home page of the public debt website, http://www.dt.tesoro.it/en/index.html .
The public sector borrowing requirement is published monthly through press releases in the specific section in the Ministry of Economy and Finance website, www.tesoro.it.
Finally, General Government net borrowing and the GDP at market price are elaborated by Istat and available at this link: http://www.istat.it/fmi/ITALY-NSDP.html

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What are the Guidelines for Public Debt Management?

The document "Guidelines for Public Debt Management" describes the guidelines that the Treasury intends to follow in the following two years regarding the issuance policy and public debt management.

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What is accrued interest?

Accrued interest is the interest rate quota already matured from the last coupon payment to the date considered. For further information on the calculation of accrued interest you can check the specific document in the website.

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What are exchange transactions?

Exchange auctions are those in which the Treasury issues a new bond and is paid by an outstanding one. To the issuer, the exchange transactions are a further instrument for debt management . The announcements and the results of these transactions are available in the  Special Transactions. Only Specialists in Government Bonds are allowed to participate.

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What is the coupon stripping?

Coupon stripping is the splitting of coupons from the bond's nominal amount to be redeemed. Coupon stripping transaction generates a zero coupon bond series from each bond. For further information you can check the specific area dedicated to the coupon stripping.

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Are there Government bonds issued abroad?

The Republic of Italy is considered one of the most significant issuer on international capital markets, besides the role already played on domestic market. Issuance programs on the international capital markets aim at diversifying  the investor base in order to curb the whole cost of funding and properly address the refinancing risk. The Republic provides funding in the international capital markets through Global Program, the Medium Term Note Program and Commercial Paper Program.

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Is it possible to hold a printed Government bond?

Thanks to the dematerialization process the management and the accounting of the government securities has been made easier and  more efficient. Since 1998 government securities are represented by accounting entries in favour of the entitled. Dematerialization was introduced by the Legislative Decree June 24, 1998 n.213.

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What does “secondary market” mean?

The secondary market is the market on which Government bonds trading  takes place. The existence of a secondary market promotes liquidity, so as bonds  can be sold before redemption at a relative fair price. The Electronic Platform Secondary Market of Government bonds (MTS), set up with a Ministerial Decree in 1988, is managed by M.T.S. SpA. Corporation. Besides M.T.S., which is a wholesale market, there is a retail secondary market where you can negotiate government bonds and other securities (MOT), managed by Borsa Italiana SpA. Finally it is possible to buy and sell government bonds, through financial intermediaries, even on non regulated markets (so-called Over the Counter markets).

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Is there a Public Debt newsletter or mailing list?

On the home page of the website http://www.dt.tesoro.it/en/debito_pubblico/ in the "SUBSCRIPTIONS" section you can sign up to receive all the documents published in the sections:“Auctions of Government Bonds”, “What’s new” and “Invest in Government bonds – Investor’s calendar” by email.

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