BTp Value rises to 13 billion, rate increase on the table

The BTp Valore also travelled briskly on the third day of the offering, with 2.79 billion raised in 94,884 contracts, bringing the provisional total to 13 billion and 406,064 subscribers. These numbers continue to place the bond in third place in the historical series of Treasury bonds in the 'Value' family, with no substantial change in the ranking. But as the closing of the placement, scheduled for Friday 6 March at 1.00 p.m., draws nearer, questions about a possible upward adjustment of yields are becoming more dense; a hypothesis that at the moment does not seem improbable, even if the verdict will be known only at the end of the offering.

After two stormy days, the markets also changed course on the bond market on Wednesday, with the ten-year BTp closing at 3.43% (from 3.47% on Tuesday), reducing the spread over the Bund from 70 to 67.5 points. But the fact remains that at the moment yields over the entire six years covered by the new BTp are travelling between 8 and 13 basis points above last Friday's opening levels, when the 'Value' coupons were defined. Today therefore seems to be the decisive day to understand the final fate of the comparison.
On this basis the calculators at the Treasury, where the initial offer was shaped with a premium of around 30-31 points over BTp of similar duration, will be turned on again.

In fact, the new bond intended for families and small investors envisages a triple step, which raises the gross annual coupons (recognised, however, as always on a quarterly basis) from 2.5% in the first two years to 2.8% in the second, to reach 3.5% in the final two years. Over the six years, this gives a gross annual yield of 2.946%, which rises to 3.08% considering the loyalty premium of 8 per thousand reserved for those who purchase the security during these days of the offer and keep it in their portfolio until the maturity date of 10 March 2032. And the offer was conducted on the basis of a comparison with the 2.77% offered last week by the ordinary BTp with a similar maturity, which today instead travels around 2.9%.
It should also not be overlooked that the architecture of the rates, articulated for the first time in three periods of two years each, lends itself to a comparison also with shorter maturities. Depending on the yield curve that will appear on the terminals on Friday morning, therefore, the adjustment (always eventual, at the moment) could also concern only a part of the coupons offered, in a delicate balance that must however take into account several factors: the effective bonus offered by the BTp for families compared to ordinary "competitors", the weight of the coupons on the public budget, and the succession of rates designed to incentivise the loyalty of savers not only with the final bonus, but also with the highest step placed in the last two years of the bond's life.

It will be seen. But it is important to remember that the rates communicated last week by the Treasury are the 'guaranteed minimums', and that there is no shortage of recent precedents in which the final coupons have been somewhat higher. The most recent was in February last year when the 'BTp Più', another Italia government bond named 'Valore', offered 2.85% over the first four years, instead of the 2.80% thought at the start, and raised the annual coupon for the second four-year period from 3.6% to 3.7%.
In any case, the numbers milled in recent hours show that demand for the BTp Valore remains solid, even if the statistics show a slightly more marked slowdown than in previous editions. In fact, on Wednesday the new bond totalled 21.4% of total deposits in the first three days, compared to an average of 25.6% recorded by previous editions of BTp Valore. The momentum is still enough to bring even the latest arrival up to the levels of success beaten so far by securities in this vein. But the rate game is still open.