What are Treasury Securities?
A brief description of BOT, CTZ, CCTeu, BTP, BTP€I and BTP Italia in order to know more on the various kinds of national Government Securities
What are Government bonds
How to invest on Treasury Securities?
Useful information for who wants to buy Government securities on auction or on the secondary market
How to invest in Government bonds
Transparency as investor protection
Ten advices to protect people investing in Government securities.
Ten useful pieces of information to safeguard citizens that invest in Government bonds
Where can I find the auction calendar?
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.
Where can you find information about the features of Government Securities?
The features of Government Bonds (BOTs, CTZs, 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 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.
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 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 securities section.
How does the Treasury issue Government bonds?
Government Securities are issued through an auction or placement syndicate. The main issuing instrument for the domestic market is the auction. Syndicates are used for the placement of the securities on the foreign capital market and also for the issue of new government securities.
What kinds of auction does the Treasury adopt?
Placement through auction can follow two methods: a competitive yield auction (for BOTs) and a marginal price auction (for CTZs, BTPs, CCTeus 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 dealer are allowed to participate to the auction.
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.
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.
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 CCTeus). Besides, the quarterly issuance program specifies the financial features of the bonds that will be issued in the following quarter.
Where are offering announcements of government bond auctions published?
The notices relating to each issue can be found directly on the homepage of the website. The notices are also available on the pages of the main financial information networks: Bloomberg and Reuters (MDTE index page).
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.
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/CCTeus).
Where can I find issuance prospectus of securities and CCTeus coupons?
The Government Security prospectuses consist of decrees published in the Official Journal of the Italian Republic. The value of the different coupons of the Ccteus can be found under “Statistical Data”.
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 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.
What bank commissions are applied to Government Securities?
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, CCTeus, 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.
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.
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 and only Specialists in Government Bonds are allowed to participate. The related announcements and results are published in the » Other transactions » Exchange transactions section.
What is the stripping?
Stripping is the operation of separating the coupon components from the redemption value of a security. Stripping obtains a series of zero coupon securities from each government security. For more information, please consult the section on stripping.
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.
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.
What is the prescription period for paper form bonds?
GOVERNMENT BONDS: : The right to capital and coupon redemption ends 5 years from maturity (Public Debt Consolidated Act, article 21, D.P.R. no. 398 of 30 December 2003 (read the decree);
POSTAL SAVINGS BONDS : The postal savings bonds (issuer Cdp spa) issued from 18 November 1953 to 13 April 2001 were transferred to the Ministry of Economy and Finance. For these bonds, the right to repayment of principal and interest is prescribed 10 years from the date of maturity of the security (art. 8 Min. Decree of 19 December 2000).
For further information see the prescription document.
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).
What are BTPs Italia?
BTPs Italia are the first Italian Government Securities indexed to the Italian inflation rate, with semi-annual coupons and a maturity from four to eight 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 - Euronext (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:
What are BTPs Futura?
BTPs Futura are Italian government bonds designed with the aim of supporting the national economy: its proceeds are entirely used to finance the measures adopted by the Government to support the country's economic growth.
BTPs Futura are government bonds with semi-annual nominal coupons and maturity greater than 8 years, exclusively targeted to retail investors.
In fact, together with the BTPs Italia, they are the only government bonds issued by using the MOT platform of the Borsa Italiana - Euronext (www.borsaitaliana.it), instead of the traditional auction mechanism.
Accordingly, they can be purchased at issuance not only at a bank or at a Postal Office, but also through any home-banking system equipped with the on-line trading feature.
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