All crazy for the BTP Green
Crazy about the Btp Green. Especially foreign investors. Approximately 62.6% of the issue of the new green bond maturing on 30 October 2031 e 4% annual coupon went to investors outside Italy. The Treasury placed it yesterday for a total of 10 billion, but in reality the requests amounted to 53 billion.
Among foreign investors, the share subscribed by investors residing in the was important United Kingdom (about 19.4%). The rest of the placement was placed largely in continental Europe: in France (11.8%), in the countries of the Iberian Peninsula (10.4%), in Germany, Austria and Switzerland (4.6%), in the Scandinavian countries (4.1%), in Benelux (3.2%) and in other European countries (6.2%). American investors bought around 0.6% of the issue while the remaining 2.3% was subscribed by investors residing in Asia.
The funds subscribed two-thirds of the green bond
Massive participation of ESG investors (who underwrote about two-thirds of the placement). Fund managers were allocated 42.6% of the issue, while the banks 26.9% subscribed. The participation of investors with a long-term investment horizon was high, who purchased 26.6% of the issue (in particular, 14.1% was allocated to pension funds and insurancei he 12.5% a central banks and government institutions). garlic hedge fund 2.9% of the total amount went.
The other two placements were also snapped up
The one just placed was the third issue of the BTP Green, all closed with great success. The first time of the green bond dates back to March 2021, when the Treasury collected requests for over 80 billion in total. Last September, however, the Mef placed 6 billion expiring in April 2035, collecting orders for as much as 40 billion. The auction was later reopened in November, for an amount of 2 billion.
But what is it about?
The Btp Green are medium-long term government bonds same term as long-term treasury bills, which differ from these only for the purpose of issue. In fact, green government bonds are used exclusively to finance state expenditure with a positive environmental impact, selected with the support of the Interministerial Committee and included in the Italian state budget.
In particular, the sums collected will be dedicated to financing environmentally sustainable state expenditure in the following categories: renewable sources for the production of electricity and heat; energy efficiency; transport (this sector accounted for 57% of total green expenditure in the four-year period 2018-2021); pollution prevention and control and circular energy; protection of the environment and biological diversity (15.2% of total expenditure in the four-year period 2018-2021); research.
Why are they snapped up among the institutions?
“For investors, the possibility of investing in government bonds such as green bonds, which have the clear purpose of financing projects aimed at improving one of the environmental objectives of the European Taxonomy, while maintaining the financial risk similar to that of a classic bond, is a fundamental element” he underlines Michele Morra, portfolio manager of Moneyfarm. “One of the problems with current government green bonds is that, going to finance long-term projects, they have very long maturities, which makes them very volatile, especially in the current market environment. For example, 73% of the index tracking the European government bond market has a maturity greater than 10 years and a duration greater than 12 years. An Italian green bond with a maturity of about 8 years certainly faces this problem and, in fact, the MEF has announced that two thirds of the demand is derived from ESG funds”.