The treasure will return this year with new BTPs dedicated to retail customers, in particular i BTP Valuewhich savers liked so much, and with new ones BTP Green, intended to finance environmental sustainability objectives. This is what emerges from the Public Debt Management Guidelines published by the Treasury Department (MEF).
“As is known, the Treasury has been pursuing a debt management policy for several years aimed, among other things, at broaden the involvement of small investors retail, who have the possibility or need to invest sums even limited in the direct holding of government bonds”, explains the Treasury, recalling that in past years, “the pursuit of this objective has been complex” due to the politics of low rates pursued by the ECB.
For this reason, “the share of government bonds in the hands of these investors has remained very low in recent years” – he noted – but this “trend has reversedthanks to the increase in interest rates recorded starting from 2022 and the offer of dedicated securities such as the BTP Italia, BTP Futura and BTP Valore“.
It should be remembered that, due to the increase in rates, the average cost for the service of the new debt issued rose between 2021 and 2023 from 1.71% to 3.76%, while the average life of the Italian public debt has shortened slightly, from 7.04 to 6.97 years.
BTP Value: at least two issues expected
“During the next year, in consideration of theexcellent feedback received from the market on issues dedicated to the public of retail savers, the Treasury will continue to propose these instruments”. In 2023 two issues were carried out (June and October) for a total amount of over 35 billion.
In 2024therefore, “the Treasury will evaluate the opportunity to carry out one or more emissions of BTP Valore, reserving maximum discretion in evaluating the most appropriate financial structure in relation to the maturity, type and periodicity of payment of the coupons and the final extra loyalty bonus in the run-up to the placement”.
BTP Italia: one or more issues possible
During 2023, in consideration of inflationary dynamics, the Treasury maintained its commitment to providing retail savers with instrument of protection against inflation, the BTP Italiafor a total amount of almost 10 billion.
“Considering the reimbursements of three securities maturing during the year for a total amount of approximately 25 billion and the exchange operations that affected the sector, the net emissions were largely negative” in 2023explains the Treasury, recalling that “in 2024 two Italian BTPs will mature for a total of approximately 12 billion euros” and therefore “will evaluate the opportunity to carry out one or more issues of BTP Italia during the year, reserving maximum flexibility in choosing the most appropriate maturity for the new security”.
BTP Futura: dependent on market conditions
As regards the BTP Futura, the government bond reserved exclusively for the retail market, introduced for the first time in 2020 to finance the measures launched by the Government to deal with the Covid-19 crisis, the Treasury did not deem it appropriate to carry out new issues during 2023.
In 2024, the possibility to carry out a new placement will be carefully evaluated based on market conditions and demand for the instrument.
BTP Green: emissions will increase with transition
Then there is a last class of “green” finance securities linked to environmental sustainability and issued as part of a program (Green Bond Framework) drawn up in compliance with the Green Bond Principles drawn up by the ICMA (International Capital Market Association) and in line with the EU Taxonomy.
“In light of positive, broad response received from the audience of investors on the occasion of the first two Green BTPs issued during 2021 and 2022, last April the syndicated issue of the third Green BTP took place with maturity on 30 October 2031, for an amount equal to 10 billion euros” , the Treasury recalls, adding that on that occasion “it was the interest of ESG investors was reconfirmed (Environmental, Social and Governance) which subscribed approximately two thirds of the placement and whose overall demand reached 53 billion euros. Furthermore, to provide adequate support for liquidity on the secondary market, the second Green BTP maturing on 30 April 2035, issued in 2022, was reopened via marginal auction in both March and October.”
“THE proceeds from BTP Green issues – remember – they are intended for coverage of the pool of sustainable expenses present in the State Budget. In June the Treasury published the BTP Green Allocation and Impact Report 2023which illustrates the allocation of the proceeds collected with the issues of green government bonds that took place in 2022. Furthermore, the document provides an estimate of the positive environmental impact of the interventions made possible by the reported expenses, through the use of both physical result and environmental impact indicators.
“2024 will be characterized by significant developments for this market” , states the Treasury, predicting that it “will continue with its BTP Green issuance program for volumes aligned with the average of these three years of issuance, providing liquidity to existing securities and evaluating the possibility of placing a new security through syndication”.