The BTP Valore is back. Until October 6th at 12, unless early closure will be communicated by the Treasury Department, a new issue, the second after the debut a few months ago, is offered to private and non-private investors. And this one, at least on paper, will be even more attractive than the first, whose success was enormous. The June issue, in fact, closed with a record 18.19 billion euros of requests, the highest result ever in terms of subscriptions in a single placement of a government bond dedicated to small savers. And the data from the first day of subscriptions confirms this.
In a phase in which the BOT (the latest annual was placed at 4%, the highest ever reached since 2011, the time of the public debt crisis), the BTPs and also the CCTs are returning to occupy a large space in the financial market, this new government offer confirms the attention with which the public broadcaster addresses our country’s savers. The Italian Treasury Department is not only one of the largest issuers of government bonds, but it is certainly the most imaginative. Without any doubt. If the CCT, the variable coupon issue, has not shown particular variations in terms of characteristics since the first placement, the BTP has experienced and is experiencing an alternation of changes that is unique in the world. The most recent of which was called Btp Valore.
Some changes already differentiate the new issue of the BTP Valore from the first placement. The duration will be five years, with repayment at the beginning of the second week of October 2028. But the real innovation, which represents perhaps unexpected but very useful help for investors, is the coupon schedule.
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The quarterly step
The crediting will take place every three months, rather than every six, as is established for all other issues of the Italian Treasury. This feature is not only fundamental, because it brings interest credits closer, but it could also induce other government issuers to follow a similar path. In the same way as expected for the first placement, the one already mentioned in June 2023, the first three coupons adapt to the new market levels and are set at 4.10 percent, while the last two rise to 4.50 percent . Particularly interesting is the level of the coupon flow for the last two years, because, most likely, they will coincide with a phase in which the level of returns will tend to decrease. At that time, the inflation rate may have returned to levels significantly lower than current levels. Involving the values of the coupons that will characterize the bond issues of those years, which will probably assume gradually decreasing levels. Having a security in your portfolio with the current coupon level will be profitable. But it is a gamble, because no one knows with absolute certainty what will happen to rates and inflation in the coming years.
Last aspect, not because it is less important, but because it refers to the moment in which the BTP Valore will be reimbursed, is the loyalty bonus. The prize will be reserved for those who have subscribed to the BTP Valore itself in issue and have kept it until its natural maturity. The loyalty bonus, as it is called, will be equal to 0.50% of the invested capital. The loyalty bonus is a feature that the BTP Valore has in common with the other two instruments explicitly aimed at families: the BTP Italia – which incorporates the inflation of our country – and the BTP Futura, placed during the pandemic and provided with increasing fixed coupons and therefore similar, in structure, to the title that is placed for the second time.
Prices
It must be said, for the record, that in recent times the prices of all BTPs – and therefore also of the first issues of BTP Valore and of their “cousins” BTP Futura and BTP Italia – have fallen because the rise in interest rates always leads to a price cut that counteracts the increase in coupons for new issues. Those who already have them, therefore, at this moment would suffer capital losses if they were to sell now. Anyone who buys them certainly does so at a discount. For those who have time to wait, in both cases future recoveries or gains could materialize as soon as rates start to fall.
2023-10-03 05:47:12
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