Banca d'Italia works with the Ministry of Economy and Finance (MEF) for the management of public debt:
- It conducts auctions for the placement, buyback and exchange of government securities;
- It publishes the results through press releases and summary tables (only in Italian) available on its website and on those of the main financial information providers;
- It carries out non-auction transactions in the primary market for government bonds (placements, buybacks and exchange offers), makes coupon payments and principal redemptions for government securities; The prescription period for government securities is established by law;
- It cooperates with the MEF to ensure the accuracy of the balances of bonds centralized in Euronext Securities Milan and of the payments made for matured coupons and principal repayments;
- It advises the MEF on the issuance policy;
- It publishes statistics and indices regarding Government bond yields (Rendistato).
Outstanding government securities
The main types of government securities currently outstanding are:
- Ordinary Treasury bills (BOT) discount short-term securities with maturities up to 12 months, with zero coupons.
- Treasury certificates indexed to the 6-month Euribor (CCTeu): medium-term securities with variable coupons indexed to the 6-month Euribor plus a spread.
- Treasury bonds (BTP): medium- and long-term securities, with a fixed coupon paid semi-annually.
- Short-term BTP: securities with fixed semi-annual coupons and maturities between 18 and 36 months.
- Green Treasury bonds (Green BTP): medium- and long-term securities, with fixed semi-annual coupons. The proceeds from Green BTPs are earmarked to finance public expenditures with a positive environmental impact.
- Inflation-indexed Treasury bonds: medium- and long-term securities, with variable coupons obtained by applying a fixed rate to a principal indexed over time to the evolution of consumer prices in the euro area, for the Treasury bonds linked to euro-zone inflation (BTPI), and in Italy for the Treasury bonds linked to Italian inflation (BTP Italia). For BTPIs the revaluation of the principal is paid in full at maturity, while for BTPs Italia it is paid every six months.
- BTP Futura: government securities reserved for retail investors, with predetermined coupons increasing over time based on a step-up mechanism. BTP Futura pays a loyalty premium to investors who purchase the security during the initial placement period and hold it until maturity. The premium is calculated on the basis of the average annual growth rate of Italy's nominal GDP over the life of the security.
- BTP Valore: government securities reserved for retail investors, with predetermined coupons increasing over time based on a step-up mechanism. The coupons can be paid at different intervals (for example, semi-annually or quarterly). BTP Valore pays a loyalty premium to investors who purchase the security during the initial placement period and hold it until maturity.
- BTP Più: government securities of the BTP Valore class, reserved for retail investors. BTP Più has a maturity of 8 years, with fixed coupons paid quarterly based on a step-up mechanism in two 4-year phases and a higher coupon rate for the second phase. It provides an early redemption option at the end of the fourth year, only for investors who purchased the bond during the placement period. The redemption option can be exercised either for the entire invested amount or for a portion of it.
- Republic of Italy securities: short-, medium- and long-term securities issued on international markets.
Aggregate data on the amounts issued and outstanding of Government bonds are published by Banca d'Italia in its Statistics Series - The Financial Market.
The issuance of government bonds via auction
Italian government bonds are issued mainly via auction, a mechanism that ensures transparency and fairness of the issuance policy.
The auctions are carried out according to an annual auction calendar published by the MEF at the beginning of each year.
Participation in the auctions is limited to financial intermediaries that fulfil specific regulatory and technical requirements and that have signed an agreement (only in Italian) with Banca d'Italia.
Banca d'Italia discloses the issuance terms for the auction (only in Italian) both on its website and on those of the main financial information providers. Through the same channels and with an ad hoc press release, it publishes the results of each auction (only in Italian).
Banca d’Italia carries out the auctions using an IT procedure that facilitates the submission of bids by intermediaries, even from abroad, and automates the various placement phases, up to settlement. This ensures adequate robustness and security to the process.
Government bond interest rates
In addition to the yields at issuance (only in Italian), Banca d'Italia publishes:
- the Rendistato index: i.e. the monthly weighted average yield on a basket of government securities
- the six-month interest rate for CCTeu bonds
- the amount of the coupon payments for the euro-area inflation-indexed BTPs
- the amount of the coupon payments and of the principal revaluation for BTPs Italia.
Money Market operations on behalf of the MEF
From 2007 to 2022, Banca d'Italia carried out money market operations through auctions and bilateral negotiations on behalf of the MEF (OPTES).
Decree 1416/22 of the MEF concerning money market operations through the Treasury payments account for treasury purposes repealed the previous legislation (Decree 25391 of 25 October 2011 and Decree 95450 of 28 November 2011) overhauled the regulatory framework, introducing repurchase agreements and deposit facilities in accordance with the latest market standards. These operations are executed by the MEF, while back office and settlement activities are carried out by Banca d’Italia.
For further information, please visit the Public Debt section of the MEF website Cash Management - MEF Department of the Treasury.
