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Ministry of Economy and FinanceBTP 7 years: inaugural issuance

Press Release N° 175 of 10/08/2013

The Ministry of Economy and Finance (MEF) has mandated Crédit Agricole Corp. Inv. Bank, Credit Suisse Securities (Europe) Ltd, HSBC France and Unicredit Spa for the inaugural syndicated transaction of a BTP 7 year. The transaction will be launched in the near future subject to market conditions. FSA/ICMA stabilisation.

Not for release, directly or indirectly, in or into the United States of America, Australia, Canada or Japan. This document (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Australia, Canada or Japan or any other jurisdiction where such offer or solicitation would be unlawful. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States or to U.S. persons unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No public offering of such securities is intended to be made in the United States.

The decision to tap the seven year maturity comes after thorough market enquiries carried out in the recent months that have highlighted an increase focus by investors and issuers on this segment of the yield curve.
The new 7 year BTP will represent a new reference point on the Italian nominal yield curve and at the same time, it will cover the ever-growing demand from investors that could not be satisfied without a benchmark bond on this maturity. The MEF’s goal is to meet this demand, providing the right balance between this new maturity and the existing ones. Moreover, keeping a stable and continuous presence on this segment of the yield curve, the MEF is aiming at enhancing the results obtained in recent years as far as the debt exposure to market risk is concerned.
The design of the new instrument totally replicates that of existing nominal BTPs issued regularly during middle and end-of-month auctions: semi-annual coupons, set at the launch of the bond, with redemption at par.
The first issuance will be launched through syndication, with a consortium of banks selected among Specialists in government bonds that will collect orders from professional and qualified investors. This issuance methodology for the launch of the new bond addresses the need to facilitate a quick and efficient distribution of the new instrument, thereby reaching a satisfactory liquidity since its inception. Future re-openings of the 7 year BTP will be offered to the market via auctions, in order to ensure an adequate final outstanding volume, in line with what already happens for BTPs at other maturities.
By means of the traditional forms of communication to the market, the MEF will provide timely appropriate publicity regarding each issuance of the 7 year BTPs and their inclusion in future issuances programs.
 

Rome 10/08/2013

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