BTP Italia: about 12 billion Euros issued

11,994.517 million Euros has been the amount purchased by retail and institutional investors during the placement period of BTP Italia 18th issuance.

The amount issued coincides with the total turnover of valid purchase contracts concluded at par on the MOT (the Borsa Italiana’s screen-based market for securities and government bonds) through Intesa Sanpaolo S.p.A. and UniCredit S.p.A. during the placement period.

In particular, during the First Phase of the placement (dedicated to retail investors), from the 14th to the 16th of November 2022, the number of contracts concluded has been 255,753 for a turnover of 7,281.189 million Euros.

The number of contracts concluded during the First Phase has been one of the highest ever recorded in BTP Italia issuances, recording a significant participation of retail investors, to whom this instrument is specifically dedicated.

This result is fully in line with the Treasury strategy of recent years, aimed at increasing the share of retail investors, in a perspective of broadening and diversifying the investors’ base.

Again with reference to the First Phase, out of 255,753 contracts concluded on the MOT around 67 per cent of them had a size of less than 20,000 euros, while considering contracts up to 50,000 euros, they were around 91 per cent of the total related to that Phase of the placement.

Although the methodology of issuance does not allow to obtain precise information about the investors’ characteristics, from the data received from Dealers and Co-Dealers, during the First Phase, it can be estimated that there was a relevant participation of individual investors compared to the private banking (with an estimated share of 72 per cent versus 28 per cent).

Within the share allotted to individual investors, requests received through the banking networks (both at the bank desk and through remote offers) and Postal Offices were estimated to be around 51 per cent, while orders carried out via home banking were about 49 per cent, the largest share recorded in BTP Italia issuances. Looking at the geographical distribution of the orders received during the First Phase of the placement, it is estimated that domestic investors bought almost entirely the amount issued during the same phase.

The Second Phase of the placement, dedicated to institutional investors, which opened and closed today, has been fully allotted for a final amount on offer of 4,713.328 million Euros.

As regards the Second Phase, data collected from Dealers and Co-Dealers allow to elaborate statistics that cover most of the amount issued.
In particular, banks and asset managers bought respectively 40.9 per cent and 39.4 per cent of the turnover. Investors with a long-term investment horizon have bought 12.2 per cent of the issuance (in particular pension funds and insurance companies for 6.4 per cent, while official institutions have been allotted for 5.8 per cent). Hedge funds have subscribed 7.3 per cent of the total amount issued. The residual share, equal to 0.2 per cent, has been allotted to non-financial institutions.
During the Second Phase, the placement of the bond saw a significant presence of domestic investors, who bought 48.1 per cent of it, while the remaining 51.9 per cent was subscribed by foreign ones. Among them, the most relevant shares have been placed in Europe, in particular in United Kingdom (20.7 per cent), Germany and Austria (16.3 per cent), Switzerland (4.8 per cent), France (3.7 per cent) and other European countries (1.7 per cent). The rest of the amount issued in the Second Phase (4.7 per cent), was allotted outside Europe, in particular to Middle East investors.

The new bond, with maturity of 6 years, has its first accrual date as of the 22nd of November 2022, maturity date as of the 22nd of November 2028 and a definitive annual (real) coupon rate of 1.60%, paid on a semi-annual basis. The settlement date coincides with the accrual date.