BTp Valore closes at 16.2 billion, rates up to 3.8 per cent

Even though the markets went on a rollercoaster ride, the BTp Valore ended the week of issuance with a respectable result: 16.2 billion in funding and 522,214 contracts registered. Evidently, in the new government bond reserved for savers, subscribers also saw a safe haven for their capital as they grappled with the unknowns of the new geopolitical shock.

The war on Iran that started as a surprise last weekend, just a few hours after the BTp offer with the indication of the minimum guaranteed yields, has also fully affected the bond market, which has seen sovereign bond yields rise, and has brought fears of a new rise in inflation back to centre stage. In this context, the Treasury has also revised upwards the yields that will measure the coupons of the new BTp: in the first two years, the bond will offer 2.6% instead of the 2.5% indicated at the outset, in the second two-year period the annual yield will rise to 3.2% instead of 2.8%, and in the final two-year period to 3.8% instead of 3.5%. The final fidelity premium, reserved for those who, after having purchased the BTp in the week of issue, will keep it in their portfolio until maturity on 10 March 2032, remains instead at 8 per thousand since it is not subject to subsequent revisions (after all, it is already at the maximum level ordinarily recognised for these bonds).

With the new rate structure, the BTp Valore rebuilds that premium over ordinary bonds of the same maturity that is the classic feature of offers reserved for the small savers' market. The two-year scansion of the steps represents a reference for comparisons on shorter maturities, at two and four years, but does not entail practical consequences for subscribers: who, as always, can sell (or buy) the BTp at any time on the secondary market.