A brief description of BOT, CTZ, CCT, CCTeu, BTP, BTP€I and BTP Italia in order to know more on the various kinds of national Government securities
http://www.dt.tesoro.it/it/debito_pubblico/_info/investire_titoli_stato.htmlCollegamento a pagina interna
Useful information for who wants to buy Government securities on auction or on the secondary market
http://www.dt.tesoro.it/export/sites/sitodt/modules/documenti_it/debito_pubblico/servizi_cittadino/come_investire_titoli.pdf (PDF, 25 KB)
Ten advices to protect people investing in Government securities. http://www.dt.tesoro.it/export/sites/sitodt/modules/documenti_it/debito_pubblico/servizi_cittadino/La_trasparenza_a_tutela_dei_risparmiatori.pdf(PDF, 124 KB)
Each year the Italian Treasury publishes a calendar of the auctions http://www.dt.tesoro.it/export/sites/sitodt/modules/documenti_en/debito_pubblico/calendario/Auction_Calendar_2015.pdf(PDF, 2 MB)
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.
The features of Government bonds (BOTs, CTZs, CCTs, CCTeus, BTPs, BTP€i and BTP Italia) issued on the domestic market are explained in detail in the files prepared for this purpose for each security and available in the Treasury securitiesLink to internal page 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 ProgramLink to internal page section.
The inflation linked BTPs are Government Securities with 5, 10,15 and 30 year maturity. They are medium-long term and floating rate 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 information you can check the specific file in the Treasury securitiesLink to internal page section.
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.
Placement through auctionLink to internal page can follow two methods: a competitive yield auction (for BOTs) and a marginal price auction (for CTZs, BTPs, CCTs and BTP€is.). Competitive bidding entails that bids are satisfied at the price posted, whereas in the marginal auction all the requests are allotted at the same price, the so-called marginal price. Only authorized dealerLink to internal page are allowed to participate to the auction.
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.
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.
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.
You can find the offering announcements for each issuance directly on the home page of our website, in the Auctions of Government bondsLink to internal page section. They are available also on the following major financial networksLink to internal page: Bloomberg and Reuters (index page MDTE).
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.
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).
The issuance prospectus of government bonds are decrees published in the Official GazetteCollegamento a sito esterno of the Republic of Italy. Some decrees, the most important, are also available in the “Laws and Regulations”Link to internal page section of this website. CCT coupon valuesLink to internal page, indexed to the 6 month BOT yield, are periodically published in the Official Gazette.
The current tax regime on Government BondsLink to internal page provides:- for all taxpayers earning interest on Government bonds and running a business activity, that 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 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 the difference between redemption value and issue price is the only interest component.
Commissions applied to subscribers of 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 levels of 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.
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.
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 and only Specialists in Government Bonds are allowed to participate. The related announcements and results are published in the » Other transactions » Exchange transactions section.
Coupon stripping is the separation 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.
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.
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.
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).
BTPs Italia are the first Italian government securities indexed to the Italian inflation rate, with semi-annual coupons and a maturity of four or six years, conceived principally to meet the needs of retail investors.
They are indeed the first Italian government securities issued by using the MOT platform of the Borsa Italiana - London Stock Exchange Group (www.borsaitaliana.it), instead of the traditional auction mechanism.
Accordingly, they can be purchased at issuance not only at a bank, but also through any home-banking system equipped with the on-line trading feature.
For further information on the BTP Italia you can check the dedicated section, at the following address:
An e-mail based service, which immediately notifies the publication of documents on the Public Debt website, is available at the “SUBSCRIBE” section that is reachable from the home page http://www.debitopubblico.it/
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