BTp Valore: orders for 1.5 billion on day four, total funding at 10.2 billion

The fourth (and penultimate) day of the BTp Valore placement catalysed just over 55 thousand orders against a total subscribed amount of 1.55 billion. With today, the total funding realised is 10.2 billion. Last February, on the fourth day of the offering of the previous issue, total requests at the end of the day stood at 2.2 billion while, at the end of the fourth day of placement, total orders amounted to 16.9 billion. The BTp Valore issue will run until Friday, 10 May, unless closed early.

In the previous three full days, total funding amounted to almost EUR 8.7 billion, EUR 2.13 billion of which in yesterday's session. The issue, maturing in May 2030, has quarterly coupons and guaranteed minimum annual rates of 3.35%, from the first to the third year, and 3.9%, from the fourth to the sixth year, and a final premium of 0.8% of the invested capital.

The bond has a term of six years, coupons are paid every three months with fixed yields increasing over time on the basis of a 3+3 year 'step up' mechanism (3.35% the first three years and 3.90% in the next three) and guarantees an extra final loyalty premium of 0.8% for those who buy it during the placement days and hold it until maturity.

Compared to the three previous editions, the premium of the guaranteed minimum rate over what was offered at the same time by BTp of the same duration (6 years) on the secondary market could be higher: from 15-20 points in the three previous cases to 30-40 basis points.

How so? This depends on the movement of market rates in the days between the announcement of the guaranteed minimum rate (in this case, this is what the Treasury announced on 3 May) and the actual start date of trading (13 May).