Great anticipation for the fourth edition of the BTP Valore, the Italian government bond reserved exclusively for retail investors created by the Meloni government, with the aim of inducing Italians to purchase increasing shares of the ‘home’ public debt, i.e. Italy’s, leveraging their patriotic spirit.
The mission launched primarily by Prime Minister Giorgia Meloni has been very successful so far: the so-called BTP People didn’t think twice about buying up the various BTP Values offered by the Treasury, attracted by the returns, in a context in which the returns on deposits parked at banks have remained slim for quite some time.
Also certifying the success of these renamed BTPs Patriotic and sovereignist BTPs – which will be issued again next week, from Monday 6 May until Friday 9 May, – have been the same data published by Bankitalia.
BTP Valore, Bankitalia confirms BTP People fever
In the Financial Stability Report recently published, Bankitalia dedicated a section to Italian government bonds, writing in black and white that “activity on the primary market continues to benefit from the direct placements with retail investors”.
The numbers speak clearly:
“at the end of February, 18.3 billion were raised through the third edition of the BTP Valore, a record for an issue of this type“. And a record already successfully welcomed by the Treasury-Mef (Ministry of Economy and Finance) which commented on the outcome of the third edition, which started on 26 February and ended on 1 March:
It’s about the highest result ever in terms of value subscribed, but also in terms of number of contracts registered in a single placement of government bonds for small savers (retail), for whom the BTP Valore is exclusively intended.
Bank of Italy did not ‘only’ highlight yet another great success that the Meloni government achieved with the third edition of the state bond.
In its latest report on financial stability, Palazzo Koch also recalled that, “in the second half of 2023, the share of government bonds held by Italian families increased sharply following the growth in yields, exceeding 10 percent“.
Instead they have “further decreased the shares of the Bank of Italy and the Eurosystemin line with the normalization of monetary policy (therefore with the so-called QT-Quantitative Tightening process launched by the ECB), as well as those of banks and insurance companies”, in a context in which – BTP Valore included – “the placement of government bonds continued regularly, with increasing quantities for medium and long-term securities and average yields at issuance falling from the October 2023 high.”
From the picture presented by Bankitalia it emerged that Foreign investors also went shopping for Italian paper.
As regards retail participation, the Bank of Italy led by governor Fabio Panetta specified that this increased on the one hand with the issues of the BTP Valore, on the other in the wake of the decision by account holders to transfer the liquidity held in bank accounts in favor of investments considered more attractivecharacterized by higher yields (as were, precisely, the BTP Valore).
BTP Value: Meloni in the fourth act. While waiting for rates, pay attention to the loyalty bonus
It is in this context of BTP People to the rescueto the delight first of all of Prime Minister Giorgia Meloni – who has never made a secret of her objective “more government bonds in the hands of Italians” – who will start the fourth edition of the BTP Valore next Monday 6 May, according to what announced with a statement from the Treasury led by Minister Giancarlo Giorgetti, last April 11th.
Before the start of the issue, the key date is that of tomorrow, Friday 3 May, when the Mef will announce the the minimum guaranteed rates.
It is worth mentioning that the final rates of the third edition of the BTP Valore had confirmed those previously announced, equal to 3.25% for the first, second and third year and 4% for the fourth and fifth year.
Again in the previous issue at the end of February, the loyalty bonus was equal to 0.7% of the invested capital, against nominal coupons paid every three months.
In this fourth edition of BTP Valore, the loyalty bonus will be richer, equal to 0.8% of the invested capital, for those who purchase it during the placement days and hold it until maturity.
Thus the Mef, in presenting the new BTP Valore, now at the starting line which will be placed, as in the case of previous editions, on the MOT platform (the electronic market for bonds and government securities of the Italian Stock Exchange), through the two dealer banks Intesa Sanpaolo and UniCredit.
This special issue delivers the opportunity to invest in a highly successful instrument such as the BTP Valore, both to those who have not yet had the opportunity to subscribe to it in the previous placement, and to all the small savers and similar to whom it is dedicated.
The new state title will have a duration of six years, coupons paid every three months with pre-established and increasing returns over time based on a 3+3 year ‘step up’ mechanism.
The Isee case and the cruise title. But Meloni doesn’t stop
For this BTP Valore, the Mef has already communicated that the usual preferential taxation for all government bonds is expected at 12.5% on coupons and loyalty bonus, exemption from inheritance taxes, as well as – as provided for by the budget law for 2024 – exclusion from the ISEE calculation up to 50,000 euros, upon completion of the measure implementation process.
The exclusion from the ISEE calculation up to 50,000 euros was therefore confirmed, after the confusion that had been generated on the case, in particular on the occasion of the third edition of the BTP Valorefollowing the bombshell clarification from INPS to the measurement “state bonds outside the ISEE”, decided with the budget law of the Meloni government.
It should be remembered the controversy that also exploded over the campaign of comunication launched by the Italian government to promote the third edition of the BTP Valore, or also the first act of 2024, with the ‘headline for going on a cruise’ commercial which immediately triggered an avalanche of criticism against the very rationale of a government bond, conceived by the Meloni government to nationalize the Italian public debt.
Meanwhile, Prime Minister Meloni goes straight on her way, convinced that It is with this bond that Italians will be able to return to being masters of their destiny.
What is certain is that the enthusiasm with which BTP People welcomed the first edition launched in June 2023 the second edition of October 2023 and the third which ended with the record of the amount collected by the Mefhas convinced the Italian government even more to focus on this investment instrument, which continues to divide Italians regarding its value.
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For his part, Meloni does not retreat, on the contrary, flaunting the success of this Italian state bond, as he did from Pescara last Sunday 28 April, when he announced his candidacy for the European elections: “The stock market has record numbers, the debt it is returning to the hands of Italians and the performance of the job market is what makes me most proud.”
