Intermonte and Barclays mixed rate bonds with initial yield of 8% – QuiFinanza

From Intermonte And Barclays a new one arrives bond at 16 years with a structure fixed to floating ratethat is, stable at the beginning but which can vary over time based on market conditions.

From Intermonte a new 16-year bond

The new bond comes from Intermonte, a listed and independent investment bank, thanks to the collaboration with the British Barclays. The first company took care of the conception, the second took care of the issue.

The title has ISIN code XS2728016739is denominated in euro, is quoted on Euro Tlx market of the Italian Stock Exchange and has, as anticipated, a maximum duration of 16 years. For the first two years the obligation provides for the payment of a gross fixed rate of 8% per year. Payment will arrive via quarterly coupon. But from the third year onwards the bond will pay a variable rate indexed to the 3-month Euribor, with a floor of 0% and a cap of 6%. Also in this case the payment of coupons will take place every three months.

The purchase will take place at a discount: the bond is issued at 100 and the issuer will keep the offer at a market price initially held firm at 99. This choice will generate an additional yield of 1%.

The coupons they could be themselves reinvest, increasing the bond’s overall rate of return. Three-month coupons are relatively rare and are particularly appreciated by retail investors, i.e. families and small savers.

Callable bond

The Intermonte-Barclays bond can be resold everytime. And the one offered to the public is a so-called “callable bond”: the issuing entity can therefore choose the path of early refund discretionary. Starting from March 2026, each year it will be possible to decide on the early redemption of the bond by paying 100% of the nominal value plus the interest relating to the last coupon maturation period.

“Despite the marked decline compared to the peaks reached last October, the level of rates remains attractive today. The appetite of Italian investors for fixed income shows no sign of waning, as confirmed by the record collection recorded by the third issue of the BTP Valore. However, even in the bond sector it is essential to keep in mind the golden rule of diversification. Furthermore, in addition to government bonds, it is also a good idea to focus on corporate bonds of high-standing companies” he declares Antonio Cesarano, chief global strategist Of Intermonte.

“This issue, thanks to the fixed to floating structure combined with the quarterly coupon, is a useful tool for diversifying the portfolio. Furthermore, it serves to ride a rate curve expected to decline for the next two years, corresponding to the easing of global monetary policy” he concludes Michele Fanigliulo, investment solutions manager of the digital division Of Intermonte.

Retail investors are also reminded of the fourth issue of BTP Valore and the classic BTPs and postal products.

The role of the ECB

The new issue takes advantage of market contingencies to guarantee maximum returns. In the first two years, the ECB’s cuts should lead to a decline in rates. The first two years is the one in which the Intermonte bond yields 8%. From the third year of returns, unless there are changes in monetary policy direction, we should see a new recovery in inflation, with consequent repercussions on interest rates.