By Silvia Marchetti
ROME (MNI) – Italy’s top lender Banca Intesa San Paolo is expanding issuance of U.S. dollar-denominated bonds with an appealing 4% fixed rate to lure domestic investors into contributing to the U.S. government funding needs, and in giving them a ‘safe investment’ during stock exchange turmoil.
The wide array of available bonds include a 3-years tenor with annual 4 percent coupon, a 7 years tenor with annual 4.5 percent coupon, and a 5-years tenor with 2.8 percent coupon. To subscribe to each bond, a minimum investment of USD $2,000 is required.
There is also an 8-years tenor with varying coupons based on the duration of the investment: 2 percent for the first two years, 2.8 percent in the third-fourth year, 3.6 percent in the fifth-sixth year, and 4.4 percent in the seventh-eighth year.
In May the lender had issued a first tranche of the 3-years and 7-years tenors, which had triggered a lot of market interest.
The new bonds are listed on both MOT and EuroTLX (part of Borsa Italiana).
The bank made a historical comeback to the American debt market in 2021 after a two-year absence, when a total of 360 orders for issued U.S.-denominated bonds topped USD $9 billion, with fund managers buying 78 percent of the issuance.
A ruling coalition source noted how Intesa San Paolo’s move follows the return to the U.S .market in 2019 of Italy’s U.S.-denominated state bonds after 10 years of absence and addresses the need to diversify investors’ portfolio in times of financial turbulence.
“With the Italian stock exchange registering its greatest losses these past few weeks since decades, as a result of many factors but primarily the Ukraine war fallout on energy prices spike, any bond, in any currency, that guarantees a 4 percent return on investment is as good as it gets, and it allows to counterbalance eventual stock losses”, said a coalition source.
Contact this reporter: silvia@macenews.com
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