MNI:Market Turmoil Threatens To Delay Italy Retail Bond-Source

Financial market turmoil following the collapse of Silicon Valley Bank and speculation over Credit Suisse could delay the sale of a new retail Italian government bond meant to fund more national investment, a source working on the subject told MNI.

The financial market sell-off could "affect the calendar provisioning," of the bond, the source said.

Preparation will continue for the sale of the bond, which would incorporate features of Italy’s existing BTP Italia and BTP Futura retail bonds, the source said. (See MNI: Italy Considers Partially-Indexed Retail Bond In 2023)

The new bond would continue to incorporate a loyalty premium for holding it to maturity and some kind of indexation between a combination of macro indicators such as GDP or inflation.

SVB FALLOUT

“We might be underestimating the consequences of SVB. It could turn into an explosive crisis”, the source said, adding that the European Central Bank could be forced to respond.

Before recent events, it had been expected that the bond would be launched just before the summer.

An Italian Treasury spokesperson was not immediately available for comment.