BTp Valore Insieme, final coupon rate of 22.25 per cent

The final ‘maxicedola’ on the BTp Valore Insieme will be 22.25 per cent, whilst its more traditional counterpart will see yields rise from 3.7 per cent in the first two years to 4.1 per cent in the second, reaching 4.7 per cent in the fifth and final year of its term.

The Treasury has announced the minimum guaranteed yields on the two BTp Valore bonds – government bonds aimed at households and retail investors – which will be on offer from Monday 19 to Friday 23 October, subject to the option of early closure, which, however, has never been exercised to date.

Both have a five-year maturity. However, for the first time, the Ministry is offering savers a simultaneous dual issue. The stated aim is to encourage the greatest possible diversification within bond portfolios – a principle that is always wise but particularly important in complex times such as these.
The innovation lies in the ‘BTp Valore insieme’, which, for the first time in a security aimed at the retail market, dispenses with periodic coupon payments to concentrate the return at maturity, with a lump-sum payment that is not simply the sum of the quarterly coupon payments of the traditional BTp Valore. On an annualised basis, the gross yield stands at around 4.10 per cent, thus offering savers a premium over ordinary BTps with the same maturity, which currently yield 3.95 per cent. The positive spread inherent in the BTp Valore Insieme effectively compensates for the time value of money – that is, the waiting period required of savers who might otherwise invest or use the periodic returns as and when they arise. So far, these are the guaranteed minimum rates: the final rates will be known, as always, at the end of the placement week, and may be the same as those just announced or revised upwards if market trends over the coming days push in that direction.

Given the upcoming change, a few clarifications are in order. First of all, both securities can be sold (and purchased) on the secondary market at any time, as is the case with all BTps. In the event of an early sale of the ‘Valore Insieme’, the investor will receive a share of the expected total return, calculated in proportion to the period during which the BTp was held in their securities account. Furthermore, the choice between the two BTps is not a ‘take-it-or-leave-it’ situation: each will have a life entirely independent of the other and its own ISIN code, meaning that interested investors may purchase one or both securities, allocating the capital invested as they see fit.

Otherwise, the new offering follows the traditional procedures. Purchases, with a minimum denomination of one thousand euros as always, are made at par and commission-free during the week of issue. Both the quarterly returns on the classic BTp Valore and the final return on the Valore Insieme are subject to the preferential tax rate of 12.5 per cent and are exempt from inheritance tax. Portfolios of up to 50,000 euros are not included in the calculation of the Equivalent Economic Situation Indicator (ISEE).