The first June auctions of BTPs and BOTs concluded positively, with a collection of 12.5 billion euros. The yields were all around 3%, although there was slightly less demand for the Bots than what is considered ideal for a government bond auction.
The second issue, that of medium and long-term securities, was drastically reduced, with the auctioning of only one product, a 3-year BTP. This is because the Treasury has arranged a syndicated issue for the foreseeable future.
The result of the Bots auction on June 10th
The BOT auction on June 10th put two tranches of 12-month Treasury bills on the market, maturing on June 14th next year. The bonds will be issued today, June 12, together with the settlement, and will therefore have a duration of exactly 367 days. Demand remained slightly below the threshold of 1.50 considered optimal, with a coverage ratio of 1.43 given by a request of 12.2 billion euros against an offer of 8.5 billion.
The weighted average price was 97.326 at the sale. Bots have no coupon and therefore their return is generated by the difference between this price and the nominal one. The result was a yield between 2.691% and 2.698%. Although the Treasury had also offered 850 million euros to the specialists, there were no requests for this portion of the BOT and therefore the final figure of the issue is 8.5 billion euros.
The medium-long term auction, reduced
On June 11th, what should have been the auction of medium-long term bonds was held, but which ended up being only an auction for a three-year BTP. The rest of the products were not issued, because the Treasury preferred to organize a syndicated issue of 7- and 30-year BTPs in the near future, depending on market conditions.
Demand, in this case, was strong, with a coverage rate of 1.62. The Treasury placed 4 billion in securities with a demand of over 6.4 billion. The result was a price very close to 100, resulting in a yield of 3.03%, slightly higher than the expected coupon of 3.00%. Also in this case, the specialists did not request the additional amount available, equal to 1.2 billion euros.
The next auctions in June
The first session of government bond issues of the month concluded with the auction on 11 June. The next appointments will be:
- Wednesday 24 June, auction of Short Term BTPs and BTP€i;
- Thursday 25 June, Bot auction;
- Friday 26 June, medium-long term auction.
Furthermore, next week, between 15 and 19 June, there will be the opportunity to purchase Btp Italia Sì, the new inflation-indexed government bonds dedicated to retail investors.
