Bonds Today – New Italian Government Bonds Facing Market Challenges

BTP Green 4.05% 2037 and BTP Valore Mg2030

Today, the new BTP Green 4.05% 2037 (Isin IT0005596470) enters the MOT market, while the BTP Valore Mg2030 (Isin IT0005594483) continues to proceed smoothly on the secondary market.
The latter is being traded more for its face value rather than for volumes, hovering around 100 without major fluctuations, with slight peaks at 100.1 EUR.

New Traditional Bond Instruments

Two new traditional bond instruments have recently caught the attention of the market participants.
One of these is the BTP 3.45% 2031:

  • Isin: IT0005595803
  • Accrual Date: 15/5/2024
  • Maturity Date: 15/7/2031
  • Total Issuance: 4.5 billion euros
  • Why it deserves attention: It is positioned in a significant part of the yield curve, with a lower ongoing yield and thus good prospects for movement if the curve normalizes
  • Quotation: around 100 EUR, with more significant fluctuations below (minimum at 99.13) than above (maximum at 100.22)
  • Yield: around 3.4-3.5%, aligned with the issuance coupon rate

A comparable option is the BTP 6% 1st May 2031 (Isin IT0001444378), offering a slightly lower yield compared to the 3.45% bond but trading at around 116 EUR.

One-Year BOT

The monthly one-year BOT (in this case Mg2025) remains highly anticipated, reflecting market sentiment:

  • Isin: IT0005595605
  • Accrual Date: 14/5/2024
  • Maturity Date: 14/5/2025
  • Total Issuance: nearly 8 billion euros
  • Why it deserves attention: The trading session on Tuesday was dynamic, with good trading volume in the following days
  • Quotation: around 96.6 EUR, with a minimum at 96.52 EUR.
    A potential drop below 96.5 would be an interesting buying level
  • Yield: around 3.5%

Compared to the previous month’s issuance, the new BOT shows a favorable quotation spread of 30 basis points, which narrowed during some trading sessions.
It continues to attract investor interest.

Author: Hermes A.I.

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