Btp Italia, the new anti-inflation security can be purchased from 14 to 16 November Here’s how it works – Corriere.it

The land for sowing the new BTP Italy, in placement from Monday 14 November 2022 for individuals, is particularly fertile in this economic and financial context. The cost of living, driven by the winds that come from raw materials, has risen to unexpected levels and will continue to remain there for not a few more months. The hike in the reference rate that the ECB has chosen as a restrictive strategy, to bring the value of inflation back to the 2% level, will take anything but a short time before being successful.

Investing part of the liquidity available in the new Italian BTP to be placed should, in retrospect, be an excellent choice. The duration of the issue is six years, a period of time that does not expose to excessive risks, even if the current level of the reference rate of the Eurozone will increase further. The mechanism that regulates the title and the subscription rules are described in detail a little further on. Within two years, six previous issues will be repaid. For a year now, the profitability that this type of instrument has ensured to holders of Italian BTPs already in circulation has reached 8% gross on an annual basis, an unexpected but highly profitable figure. As anticipated, the high cost of living will characterize our country, the Eurozone, but also the United States and the United Kingdom for not a few months. Basically the most economically advanced part of the globe.

The strategy

What strategy to implement? Excluding that the entire saved assets must be allocated to Italian BTPs in issue, the strategy to be implemented must be adequate to the personal propensity for risk. The duration of the new bond linked to the Italian cost of living, six years, as anticipated, exposes to fairly low interest rate risks, since, in fact, the rise in inflation is largely passed on to the investor. Anyone who is able to live with hypothetical fluctuations in significant market prices could enter a share of the new Italian BTP equal to 15-20% of the investment destined for the bond sector into the portfolio. Possible significant fluctuations could occur when the target of 2% increase in the inflation rate is approached: this is, for now, a rather remote hypothesis, in light of the costs of essential raw materials.

Those who do not like to take excessive risks can limit the investment in the new BTP to a share that varies between 7.5 and 10% of the share invested in the bond sector of their securities portfolio. The Italian Treasury Department proposes for the eighteenth time the BTP indexed to Italian inflation. There are currently ten issues remaining in circulation: in October 2020 the last of the eight issues that complete the picture of the placements made was redeemed. The picture of coupons put at the service of the Italian BTPs which today are in the portfolios or on the secondary market is varied. The lower figure is 0.25% and the higher figure is 1.60 percent. Both gross of the 12.50% tax and flanked, as happens in particular in recent months, by the credit linked to the inflation accrued in the six months that characterize the date of enjoyment. Operationally, the time frame in which it will be possible to subscribe to the new BTP Italia issues is from the 14th to the 16th of the current month.

The purpose

While professional operators will be able to subscribe the same BTP Italia on day 17. Where the request is particularly high, it is possible that the three days indicated for the subscription will be reduced, subject to public communication by the Ministry of Economy and Finance. The redemption date is set for November 22, 2028, while the subscription payment will be made on November 22, 2022.

The provisional value of the guaranteed minimum annual rate of 1.60% was announced on Friday 11th. The definitive figure, which cannot be lower, will be announced on the following 17th November. a loyalty bonus of 8 per thousand is envisaged for those who purchase the security upon issue (Isin IT0005517187) and hold it until maturity, in 2028. To date, the total value of BTP Italia placed has been equal to 181.1178 million euros, against 2,135,459 contracts signed by the buyers. The success of the instrument with domestic and international savers is unquestionable.