The Ministry of Economy and Finance announces that the next issuance of BTP ITALIA the government bond indexed to the national inflation rate conceived for individual investors, will take place from Monday, October the 20th until Thursday, October the 23rd 2014.
There are no changes in the financial characteristics of the bond with respect to the one issued in April 2014: 6 year maturity, semi-annual coupons indexed to the FOI (Indice dei prezzi al consumo per le famiglie di operai e impiegati, al netto dei tabacchi) to which the payment of the accrued inflation in the semester is added (with a floor in the event of deflation), bullet format and final bonus for those who buy the bond at issuance during the phase of the distribution dedicated to individual investors and other persons similarly classified and hold it until maturity.
For this new issuance there will be an innovation regarding the phase of the distribution dedicated to institutional investors, which will take place in the morning of the last day. In particular, in case total orders collected are greater than the final supply decided by the MEF, an allotment procedure will be activated. On the contrary, for individual investors and other persons similarly classified there will not be any rationing, as incoming orders will be fulfilled completely, as in all the previous issuances.
In order to differentiate the two types of investors, as already done in April, the bond will be placed on the market through MOT, the Borsa Italiana’s screen-based market, in two phases: the First Phase, from October the 20th to October the 22nd (three days which may be reduced to two in the case of early closing) where only individual investors and other persons similarly classified are admitted, while the Second Phase, which will take place in the morning of October the 23rd, will be reserved to institutional investors.
In the coming days, the MEF will publish on the website of the Public Debt the term sheet for the new bond and it will update the FAQ to provide investors and market operators with all the necessary information in order to take part in the next placement.
The guaranteed minimum annual real rate of this new issuance will be communicated to the public on Friday, October the 17th, 2014.
This is the second and last of the two planned issuances for 2014, the seventh since BTPs Italia were launched for the first time by the MEF in March 2012. In the past six issuances, BTPs Italia have been placed for around 87 billion Euros.
For more information about the characteristics of the bond: www.tesoro.it
In any case, more information can be requested at: dt.gruppo.info@mef.gov.it
What is BTP Italia?
BTP Italia is a government bond indexed to the Italian inflation rate conceived principally to meet the needs of retail investors. BTP Italia provides investors with the protection against an increase in the level of prices in Italy, with the semi-annual coupons that offer a guaranteed minimum annual real rate linked to the FOI index (Indice dei prezzi al consumo per le famiglie di operai e impiegati, al netto dei tabacchi) to which the payment of the accrued inflation in the semester is added. In the event of deflation, the coupons are still calculated on the nominal principal amount invested, with a protection not only to the nominal principal, but also to the coupons.
Key Features
- Maturity: 6 years
- Guaranteed minimum annual real rate
- Semi-annual coupons calculated on the revalued capital
- Immediate inflation hedge through principal revaluation paid every six months
- Nominal principal guaranteed at maturity, even in case of deflation
- Final bonus for investors (individual investors and other persons similarly classified) who purchase the bond during the First Phase of the placement period and hold it until maturity.