The Ministry of Economy and Finance has announced a new issue of government bonds, with an auction scheduled for this end of March involving 5- and 10-year Short Term BTPs and BTPs indexed to European inflation (BTP€i).
The Mef calendar provides for bookings by the public by March 24th, while applications for auction must be submitted by 11:00 on March 25th. The additional auction will be held the following day, with settlement set for March 27.
New BTP auction
In detail, the Treasury will offer: Short Term BTPs with maturity 28 February 2028 and annual coupon of 2.20% for an amount between 1.75 and 2 billion euros, 5-year BTP€ia (maturity August 2031 and 1.10% coupon) for an amount between 750 million and 1 billion and 10-year BTP€ia (maturity May 2036 and coupon 1.80%) with the same issue range.
The placement will take place via a marginal auction with discretionary determination of the award price. The Mef specifies that the amount actually assigned may be reduced by excluding offers considered unaffordable based on market conditions. The minimum amount that can be subscribed is one thousand euros.
| Typology | ISIN code | Expiration | Coupon | Max offer (mln) |
|---|---|---|---|---|
| Short Term BTPs | IT0005692410 | 02/28/2028 | 2.20% | €2,000 |
| BtpEi 5 Years | IT0005657348 | 08/15/2031 | 1.10% | €1,000 |
| BtpEi 10 Years | IT0005588881 | 05/15/2036 | 1.80% | €1,000 |
Short Term BTPs expiring in 2028
The Short Term BTP is a BTP which, as the name itself suggests, is short term and its fixed coupon is 2.20%. It is suitable for those who have a short time horizon and are looking for security. Being less sensitive to changes in interest rates than long bonds, it is ideal for parking liquidity that could be needed in a couple of years, protecting capital from extreme volatility.
Btp€i 5 and 10 years with maturities in 2031 and 2036
The 5-year BTP€i and the 10-year BTP€i are securities indexed to European inflation. They pay a fixed real coupon (1.10% and 1.80% respectively) but both the coupons and the repaid capital are revalued based on the price trend in the Euro area. These titles are suitable for those who fear that the war in Iran and the oil shock will cause inflation to soar. It should be remembered that today some analysts consider the crisis systemic (after the very close succession of the pandemic, the war in Ukraine, the war in Palestine, the change of regime in Venezuela and the war in Iran). In this scenario, Btp€i offer direct protection of purchasing power that fixed rate securities do not have.
How to buy
Participation in the auction is reserved for specialized operators who will be able to submit up to five offers each, with a minimum amount of 500,000 euros per proposal. The public will still be able to access the securities through these intermediaries, without additional intermediation charges. Intermediaries include your own bank if authorized, Poste Italiane and other authorized specialists.
There is also an additional quota reserved for specialists, up to 20% for Short Term BTPs and 15% for BTP€i, assigned at the price determined at auction.
If, upon entering the trading and investments area of your home banking, you are unable to proceed with the purchase, this means that your operator is not authorized. In this case it will be necessary to wait for the following days to access the secondary market.
