The placement of the new BTP Valore is starting at great speed. The Treasury this morning started subscriptions for the third series of the security dedicated exclusively to small savers, with the aim of increasing the share of debt in the hands of Italians.
The requests have already been decided: orders exceeded 1 billion euros just before 10.00am, Reuters reports, crossing this first milestone slightly before the subscription last October, when the first billion was reached around 10.15am.
Features
The 6-year bond will be offered until Friday, unless closed early. The minimum guaranteed coupons were set at 3.25% for the first three years and 4.0% for the following three, with a loyalty premium of 0.7% for those who hold it until maturity.
In the previous edition, Via XX Settembre collected subscriptions for 17.2 billion euros.
The share of BTPs held by small investors and Italian non-financial companies rose from 6% in mid-2022 to 13.5%, the highest since the end of 2014, but still far from the 20% before 2008, according to Bankitalia data .
The attention of savers, historically very fond of Italian government bonds, is high. This is also due to the mechanism of coupons increasing over the years (step-up) which will offer a higher prospective rate. ECB rates are expected to fall and this means that they could soon be lower than those offered by the upcoming BTP Valore.
The quarterly coupon
Small savers will certainly also be attracted by a more practical aspect, namely the quarterly distribution of returns which allows them to see coupons flow into their current account more frequently and with favorable taxation (in the case of government bonds it stops at 12.5% compared to 26% for other investment instruments) as well as exemption from inheritance taxes and exclusion from the ISEE calculation, upon completion of the implementation process of the measure.
The security can be subscribed by contacting your contact person at the bank or post office where you have a securities account or through your home banking, if enabled for online trading functions.
There are many incentive aspects, especially after the long period of zero rates. It should be remembered, however, that there is no shortage of risks: as has already happened with other issues, for example Btp Italia or Btp Futura on the market, the values could fall on the price part. New phases of volatility on the markets could push prices down. It means that anyone wishing to sell before the bond’s natural maturity could risk losses on the capital. To avoid them it would be necessary to wait for the natural maturity of the security (or a return of values above the issue price). It is therefore necessary to make good assessments of the timing and composition of the portfolio. To avoid unpleasant surprises.