The BTP Valore continues to receive orders on the MOT market of the Italian Stock Exchange, also due to the effect of the war in Iran and the greater risk aversion of retail investors who, in a dramatic week for the stock markets, rushed to purchase what is now the government bond most loved by Italian savers. And in view of the closing of the placement, an increase in the minimum yields announced last Friday by the Treasury is already expected.
The rush of orders doesn’t stop
On Thursday, the fourth day of placement on the MOT, the orders for the seventh issue of the BTP Valore do not seem to show signs of tiredness, for a total of 2.07 billion euros, equal to approximately 73 thousand contracts. This value, added to the over 13 billion already collected in the previous days, brings the total to approximately 15.1 billion euros, for 479,233 contracts with an average per capita value of 31,497 euros.
In detail, the first day of placement, which is usually the most significant, closed with a collection value of 6.04 billion euros (around 177 thousand contracts signed, for an average value of over 34 thousand euros), the second with 4.19 billion euros (around 134 thousand contracts, for an average value of over 31 thousand euros) and the third with 2.8 billion euros (around 95 thousand contracts, for an average value of approximately 29 thousand euros).
The last day and the announcement of the final rates
The placement of the seventh issue of the BTP Valore will close today at 1pm, after which the Ministry of Economy and Finance (MEF) will announce the final rates, which naturally derive from the request and success of the issue, as well as from the current yields of BTPs of the same maturity on the market.
Last Friday, the MEF communicated the minimum guaranteed coupon rates equal to: 2.50% for the 1st and 2nd year; 2.80% for the 3rd and 4th year; 3.50% for the 5th and 6th year. Yields that are already expected will be revised upwards, in consideration of the strong demand and the yields of similar securities listed on the bond market.
What’s next for the final returns
As mentioned, the performance of the stock and bond markets this week, also influenced by geopolitical tensions, has pushed bond yields higher. The ten-year BTP reached 3.57% yesterday from 3.42% on Wednesday, although it retraces today to 3.55%, much higher than the 3.28% of last Friday (+27 basis points), the date of the announcement of the minimum guaranteed rates. At the same time, the 6-year BTP, a maturity similar to that of the BTP Valore, stands at 3.12% from 3.13% yesterday, but is approximately 30 basis points higher than last Friday’s rate of 2.82%.
Summarizing the features
The BTP Valore provides nominal coupons paid every three months and a maturity of 6 years with an extra final premium equal to 0.8% of the invested capital. The rates follow a step-up mechanism which provides for a step every two years (2+2+2) at a yield no lower than that announced on Friday 27 February.
The security can still be purchased by the saver for a few hours through their home banking, if enabled for online trading functions, or by contacting the bank or post office where they have a current account and a securities deposit account. The placement of the Security takes place on the MOT electronic platform (the electronic market for bonds and government securities of the Italian Stock Exchange) through three dealer banks, Intesa Sanpaolo, UniCredit and Banco BPM and two co-dealer banks, Banca Monte dei Paschi di Siena and ICCREA Banca.
The usual preferential taxation is provided for all Treasury bonds at 12.5% on coupons and extra final premium, exemption from inheritance taxes, as well as the exclusion from the ISEE calculation of up to 50,000 euros invested in government bonds.
