Success for the twin BTp Valore issues: total proceeds reached 16.6 billion. Yields revised upwards
For the dual transaction, results were in line with previous figures. 72.3 per cent of purchases were concentrated on the traditional bond with half-yearly coupons. There was a slight increase in yields
The Treasury’s first dual issue of BTp Valore has closed with 16.6 billion in subscriptions: almost three-quarters of the amount placed went into the traditional bond tranche with half-yearly coupons, totalling 12.07 billion (72.9 per cent), whilst the remainder went to the BTp Valore Insieme, with a single final coupon payable at the five-year maturity (4.55 billion, 27.7 per cent of the total).
In line with previous cases
The dual-tranche arrangement – a mechanism never before seen in retail market offerings – has therefore resulted in a slight upward adjustment to the average proceeds from the placement of this series of government bonds aimed at savers and households, which to date have totalled just over 16 billion per issue.
This is by no means a foregone conclusion, and it dispels some of the pre-event fears fuelled by a market unsettled by inflation and uncertainties surrounding the sovereign debt of France, the US and Japan.
Final rates
This week’s fluctuations have not affected subscription levels, which remained strong throughout all five days of the placement. However, they have had an impact on the rates, which the Treasury decided yesterday to revise from the guaranteed minimum rates announced a week ago.
The traditional BTp Valore will therefore see its coupon rates rise from 3.75 per cent in the first two years to 4.2 per cent in the second two years, ending at 4.75 per cent in the fifth and final year of its term (compared with 3.7 per cent, 4.1 per cent and 4.7 per cent assumed prior to the issue).
