Italy unveils retail-only ‘BTP Futura’ bond to fund coronavirus measures

ROME: Italy’s Treasury set out plans for a new bond, for retail investors only, called the “BTP Futura”, whose proceeds will be entirely used to fund measures to help the economy recover from the coronavirus epidemic.

Rome, which manages one of the world’s

€2.4 biggest debt piles, topping trillion (US$2.71 trillion), is keen to widen its funding sources, Treasury director-general Alessandro Rivera said at a news conference to illustrate the bond.

It will be put on sale for the fist time from July 6-10 and will have a maturity of eight to 10 years, with a final decision to be announced on June 19.

Italy is set to borrow half a trillion euros this year to help weather the pandemic and the Treasury is aiming to gradually double the amount of Italian sovereign bonds held by small investors.

The focus on ordinary citizens comes at a time when Italy’s banks, which have played a key role in supporting Rome in the past, are limiting their domestic sovereign exposure due to pressure from regulators and investors.

The yield on the BTP Futura will increase over time and include a “loyalty premium” for investors who hold it until maturity, which will be linked to Italy’s nominal gross domestic product growth.

“The premium will be worth at least 1% of invested capital and it may increase up to a maximum of 3%,” said Davide Iacovoni, the Treasury’s debt management chief. He said the Treasury was optimistic about the outcome of the placement although he added that it would be unlikely to reach the €14bil

raised from small savers in May through the latest BTP Italia inflation-linked bond.

A second issue of the BTP Futura is scheduled after the summer.

€280bil So far this year Italy has issued in sovereign bonds including Treasury bills,

€80bil around more than was placed in the same period of 2019.