MNI SOURCES: Italy To Complete USD Yield Curve, Issue In 2020

By Silvia Marchetti

     ROME(MNI) - Italy plans to issue dollar bonds across a broad range of

maturities over the next few years, in a multi-year bid to fill in a yield curve

with a "stable and solid" presence in the U.S. bond market, Public Debt Office

sources told MNI, adding that the timing, size and maturity for 2020's dollar

issuance are still under consideration.

     "The Treasury is strongly committed to the USD market segment (in the

Global Bond format) with the aim of completing the ... USD curve and keeping it

as liquid as possible after the successful multi-tranche transaction of October

2019," the sources said.

     Putting an end to a nine-year absence from the U.S., in October Italy

raised a total USD7 billion from 5-, 10- and 30-year global bonds. Total demand

was USD18 billion.

     The Treasury is also looking to sell bonds in other foreign currencies this

year, and is prepared to consider proposals for private placements for at least

EUR200 million and maturities of at least three years, the sources said.

     The reboot of the European Central Bank's asset purchase program means

Italy will not further boost the proportion of EMTN (Euro Medium Term Notes) in

its issuance, said the sources, adding that the Treasury aims at a balanced mix

of domestic and EMTN issuance this year.

     --EMTN PROGRAMME

     While "foreign investors came back significantly in 2019 on our domestic

products and the EMTN programme is important to widen our base of investors, we

don't think of it as a way to alter significantly our ratio of domestic versus

foreign holdings. It is not fit for that," the sources said.

     The ECB's accommodative stance and lower rates should not significantly

affect issuance maturities, said the sources, who added that Italy would not

seek to borrow at very long maturities, such as 100 years.

     "We already have a long average debt life, almost seven years," the sources

said. "Of course at these rate levels we think it makes sense to keep on having

a significant presence in long-dated instruments, but this will take place in a

market-friendly manner, without hampering the performance of the long end part

of our yield curve."

     The sources said it was too early in the year to specify Italy's funding

target for 2020. Details of upcoming green bonds, announced in 2019 by the

ruling coalition between the Democrats and the 5-Star Movement, are also still

to be determined.

     "We are at a very preliminary stage of the process (green bonds). It is too

early now to say anything about timing of issuance and size," the sources said.

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

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