MNI SOURCES: Italy May Sell More BTP Italia, More Retail Bonds

--Italy May Sell More BTP Italia, Plus Nominal Retail Bonds

--Dollar Bond Plans Remain In Place

--Bond/Bill Mix To Be Similar To 2019

By Silvia Marchetti

     ROME(MNI) - Italy could sell more of its BTP Italia inflation-linked bonds

by the end of this year and could also shortly issue a new nominal retail bond

to help fund its pandemic response, sources in the ruling coalition told MNI.

     "As at the start of last year, the plan for 2020 is to issue at least one

BTP Italia, as we have just done, but, like last year, when we ended up issuing

two BTP Italia across 2019, we may well issue another round," said one source,

after a sale of the inflation-linked bond last week raised more than EUR14

billion.

     "Having successfully raised so much just recently means we won't be likely

to do it again in the short run, but we cannot exclude there could be another

issuance by year end", said one source.

     Before another BTP, however, Italy could sell a new nominal security

entirely aimed at retail investors, possibly multiple times this year, sources

said, adding that plans for more dollar issuance remained in place.

     "Retail is Italy's focus and salvation this year," said another source.

     Rome recently raised its 2020 issuance target to EUR 500 billion from

EUR400 billion, but sources said this could be adjusted if a second wave of

Covid-19 puts further strain on the economy. The EUR500 billion figure assumes

economic contraction of up to 10%, in line with Italy's recently-approved fiscal

plan, one official said.

     "A resurgence of the virus would make us revise fiscal and growth targets

in September, October, when we take stock of the situation and start defining

our next 2021 budget plan," said one official.

     Sources confirmed more dollar bond sales, perhaps in more than one

issuance, were still on way for 2020.

     "It will however depend on market conditions and what the demand, the

appetite for Italian bonds is after the first dollar-denominated issuance," one

said.

     Italy's Treasury aims to keep its mix of bonds and bills more or less

stable from last year, with slightly more BTPs than shorter-term debt. But one

source noted that extra-low short-term rates thanks to ECB asset purchases might

provide scope for slightly issue more bills this year, depending on short-term

cash needs.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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