After the BTP Futura, which has disappeared from the radar of new issues since November 2021, the Ministry of Economy has announced a new type of government bonds that will be offered exclusively to retail customers: households only, therefore, with no possibility of subscription by banks, investment funds, insurance companies, and other institutional investors. Called BTP Valore, it will be offered with a four-year maturity and will have features that will incentivize its purchase in the primary issue and retention until natural maturity: the fidelity premium and increasing coupon.
The first issuance is scheduled between June 5 and June 9. No specific details are yet available on the initial coupon, loyalty premium, and other aspects of the new BTP Valore. “The coupons will be periodic and calculated based on preset rates increasing over time, which will be announced next June 1, together with the ISIN code that identifies the bond,” the Mef announced.
BTP Valore, what we know so far
As with all BTP bonds, the minimum denomination of the BTP Valore will be €1,000. However, the ministry informed that the ways to subscribe to it will be simplified, and commission-free, and, unlike with standard BTP auctions, there will be no ceiling: there will always be the certainty of being able to be awarded the required securities. The channels for submitting the reservation are always the same: one’s advisor at the bank, at post offices, and even through home banking if enabled for online trading functions.
The BTP Valore enjoys the same tax benefits as other government bonds: a reduced yield tax of 12.5 percent (instead of 26 percent) and an exemption from inheritance tax. The Mef also reassures that the bond can be sold on the secondary market before its maturity. However, the market experience of the BTP Futura, the other retail bond with increasing coupons for those who had held the bond seamlessly, has made this kind of product less convenient in the secondary market: the price of the BTP Futura issued in November 2021 (maturing in 2033), for example, is currently down about 25 percent.
To request more information about the BTP Valore, you can write to a dedicated email: btpvalore@mef.gov.it.
