MNI INTERVIEW2: Italy Eyes More Green, Dollar Issuance

Italy will launch fresh new green bonds next year, and could tap this week's 2045 BTP Green again in 2021 as well as issue more than once in dollars, the Treasury's general director of Public Debt Davide Iacovoni told MNI.

There will "definitely be new bonds next year," Iacovoni said in an interview, although he added "a new bond this year may be a bit challenging, because it would mean that we are not taking care of the liquidity of the existing one."

Demand was strong for the BTP Green despite market conditions, "looking not only at the quantity but the quality of the book," he said. Demand included real money and ESG accounts, and included many investors who do not usually buy Italian debt, he said.

2045 GREEN BOND

The 2045 BTP Green will be reopened at some point during the year, possibly via syndication, depending on demand.

"We need to understand how the market will behave over the next months, and what kind of liquidity we'll see," Iacovoni said, referring to future green issuance. "We will see what sort of liquidity levels we have, whether more countries are in the market."

Italy will have no problem in locating a "decent amount of green eligible expenditures" to match green issuance, although these will not include the 37% of European Covid aid earmarked for green projects, he said.

Italy would also like to do more than one transaction in dollars this year, depending on yields, Iacovoni said.

"Our commitment is there, looking at the different maturities, relative cost, where the pockets of demand are moving in order to be there. You may expect one or maybe even more".

The country now has "so much flexibility" compared to 2020, when it was only able to issue in dollars in the last part of the year, Iacovoni said.