BTPs at auction on May 28th, the coupons of 5, 10 and 20 year government bonds

The auction of BTPs with medium and long-term maturities will be held on May 28th, the last one in May. The products that will be offered have maturities from issue of 5, 10 and 20 years, but their duration is sometimes much shorter, because they are also very advanced tranches of government bonds issued in recent years.

The result is two different bonds which, despite having identical maturities, are indicated as 10 and 20 year bonds in the May 28 auction. In total the Treasury hopes to raise a maximum of 7.5 billion euros from this issue.

5-year BTPs maturing in June 2031

The first securities to be auctioned on May 28th will be the 5-year BTPs expiring in June 2031. This is the third tranche and the first issue dates back to May 4th. The most important characteristics of this government bond are:

• the gross annual coupon at 3.15%;
• the ISIN recognition code, IT0005707614.

The payment date of the first coupon is set for 1 December 2026. The amount offered will range from 3 to 3.5 billion euros, with the possibility of an additional auction of 700 million euros in value should demand allow it.

10-year BTPs maturing in July 2036

The second security in terms of residual life is the 10-year BTP, the benchmark against which the spread with German Bunds is measured. In this case it is the second tranche, with the first issued on April 22nd. The characteristics to remember in this case are:

• the gross annual coupon at 3.80%;
• the ISIN recognition code, IT0005706285.

The payment date of the first coupon in this case is 1 July 2026, which will give rise to a reduced gross rate equal to 0.734807%, which corresponds to the period of 70 days out of a semester of 181. Subsequently all coupon payment deadlines will fall on 1 January and 1 July.

The final maturity of the BTP is set for 1 July 2036. The value of the offer will vary between 2 and 2.5 billion euros with a possible additional amount of 500 million euros depending on demand.

20-year BTPs maturing in September 2036

The longest duration, even if only a few months, is that of the 20-year BTPs maturing in 2036. The reason why these government bonds have such a short residual life is that it is the fifteenth tranche of these bonds, which were issued for the first time in 2016. The fundamental characteristics will be:

• the gross annual coupon at 2.25%;
• the ISIN recognition code, IT0005177909.

The amount issued will be a maximum of 1.250 billion euros, with the possibility of an additional 250 million.

The Ccteu of May 28th

In addition to the BTPs, the Treasury will also issue two other government bonds, the CctEu, at a variable rate with a yield linked to the 6-month Euribor. For this reason, their characteristics do not indicate an annual coupon, but the annualized rate directly.

In addition to the maximum amounts, supplements of 300 and 187.5 million euros respectively can be added.