The long-awaited issue of government bonds designed to protect savers from inflation through a coupon linked to the high cost of living began this morning with a collection of over one billion euros. From the intermediate maturity at the rate of 1.6%, passing through the premium to the “drawer holders”, that’s why they entice investors so much
The Italian BTP seems to immediately repay the expectations of the market. In the first hours of a placement that began this morning and will continue for four consecutive days, the government bond designed to protect savers from inflation thanks to a coupon linked to the high cost of living has already registered orders for over a billion euros. From the interim maturity at the 1.6% rate to the “drawer” premium, this is how it works and why it entices investors so much.
The stages of the issue
After today, the subscriptions of the new BTP Italy should continue on November 15 and 16 for the general public (individual savers and family offices) and then end at 13.00 on Thursday 17 November: that day will however be reserved only for professional operators such as banks and financial intermediaries. It is not excluded that the demand for the first tranches is so high as to induce the Mef to close the retail placement early by limiting the orders to the evening of the 15th: in this case the market will be notified by 13.00 on Tuesday.
The placement coupon has a duration of six years compared to the eight that characterized the previous issue. During its entire life period, the bond will return to subscribers not only inflation (calculated according to the Foi index with the exclusion of tobaccos) but also the so-called “real coupon”: this is the rate assigned by the Treasury to this issue , which was indicated at 1.6% but could possibly be revised upwards on Thursday morning, before issuance to institutions starts. A double reward designed to guarantee savers a substantial “bonus” in the event of a high cost of living and to protect them with a guaranteed income if, on the other hand, a situation of deflation should emerge, that is, of falling prices. Among other advantages, there is a subsidized taxation of 12.5%, a premium of eight per thousand in favor of those who invest to maturity and the absence of commissions for the retail segment. Interest will be paid every six months while the principal will be guaranteed upon maturity. The minimum denomination that can be purchased will be one thousand euros.
The assignment hypothesis
Although the BTP Italia has been specifically designed for the so-called “drawer holders”, ie savers who buy the security upon issue and keep it in their portfolio until maturity, the possibility of selling it on the Mot circuit, the electronic bond market, is not excluded. Over the entire life span, the price of the instrument can in fact undergo fluctuations and someone might think of exploiting them to sell it making a profit. In this case, however, he must know that he will lose the eight per thousand premium introduced by the Mef. The technical reasons that lead the price to vary are linked to inflation expectations but the effect is quite simple: there is protection from market fluctuations but it is not total. A consideration to keep in mind when subscribing to the security: only by keeping it up to maturity can one have the mathematical certainty of recovering the capital invested.