Italian issuers race to debt markets as economy recovers

Debt capital markets are a key enabler in Italy’s recovery, as issuers from the corporate, bank and sovereign sectors seek to fund a sustainable future.

As Europe slowly starts to reopen and loosen its health related restrictions, a responsible recovery is at the forefront of the region. On 22 June, the European Commission endorsed Italy’s €191.5 billion recovery and resilience plan, 37% of which is allocated to investments to improve energy efficiency, develop renewable energy and other climate objectives.

Against this backdrop, Finance is playing a key role as Italy embarks on its next phase of recovery.

Case in point: Energy group Enel just issued the world’s largest sustainability-linked bond (SLB).

Enel marks another pioneering milestone in SLB market

Italy-based multinational energy group Enel S.p.A. continues to break records with their commitment to developing the sustainable finance sector. On 7 July, the company issued a $4 billion SLB, the world’s largest SLB from a corporate issuer so far, and the second largest sustainable issuance from a corporate this year. This surpasses the former record Enel set in early June for their €3.25bn EUR triple tranche SLB. Enel hedged the currency and interest rate risks on its $4bn SLB via a Sustainability-Linked Cross Currency Swap.

“We are firmly convinced that Sustainability-Linked finance will drive the enhancement of sustainable capital markets in the upcoming years, placing SDG-linked targets and financial value at the core of its structure, progressively replacing conventional debt,” Enel CFO Alberto De Paoli in a statement.

Enel has seen great progress in their sustainability strategy and implementation. So much so, that they have reset their decarbonisation ambition for 2030. Enel is the first issuer to have improved their KPIs on their SLBs and placed a more ambitious target on new issuances compared with older issuances, demonstrating their desire to bring investors along on their journey to accelerate the transition.

“BNP Paribas has committed to gradually aligning its greenhouse gas emissions arising from their credit and investment for own account activities with the path required to achieve carbon neutrality in 2050, joining the Net-Zero Banking Alliance. We began by disengaging from the most polluting activities like unconventional hydrocarbons or coal and setting ourselves very ambitious targets for supporting green energies and technologies. We are delighted to support our clients like Enel who have ambitious and rigorous environmental commitments,” said Yann Gérardin, Group COO and Head of Corporate & Institutional Banking, BNP Paribas.

In the month of June alone, BNP Paribas helped Italian issuers as diverse as the Republic of Italy, to established lenders like UniCredit, to exciting new operator illimity, raise funds in formats ranging all the way from Treasury bonds to deeply subordinated debt, and carrying durations ranging from short-dated debt to perpetual bonds.

Christopher Bond, Head of FIG DCM, EMEA
BNP Paribas

Another important point on the transactions BNP Paribas arranged is that as many as half are green or sustainability linked – a sign that Italy is investing in a sustainable future and a responsible recovery.

Federica Sartori, IG Finance – Head of DCM Italy
BNP Paribas

The healthy activity in Italy’s debt capital markets reflects positive sentiment that Italy’s economy will recover. The fact that BNP Paribas has supported a majority of the significant increase in activity reflects that BNP Paribas is a trusted partner for Italian issuers.

Giulio Baratta, Head of DCM Corporates EMEA
BNP Paribas

Italian issuers flood debt capital markets ahead of the summer

BNP Paribas has supported a full range of Italian issuers raise various types of debt, including:

  • ENI €1bn Inaugural 7yr Sustainability-Linked Bond (7 June)
  • Republic of Italy €10bn 10yr BTP Benchmark (8 June)
  • Enel €3.25bn Triple-tranche Sustainability-Linked Bond (8 June)
  • Poste Italiane inaugural €800m PerpNC8 hybrid (16 June)
  • Terna Rete Elettrica Nazionale  €600m 8yr Green Bond (16 June)
  • Cassa Depositi e Prestiti (CDP) €500m 8yr Social Senior Unsecured bond (23 June)
  • Assicurazioni Generali Inaugural Sustainability €500m 11yr T2 (24 June)
  • Republic of Italy Certificati di Credito del Tesoro Linked to Euribor (CCTeu) €6bn long 7yr (24 June)
  • SNAM €500m 10yr Transition Bond (30 June)
  • Unicredit AT1 €750m PNC7yr (30 June)
  • Illimity Bank inaugural T2 €200m 10nc5yr (30 June)
  • Credito Emiliano €750m 7yr Covered Bond (30 June)
  • A2A €500m 10yr inaugural Sustainability-Linked Bond (7 July)
  • Banca Popolare di Sondrio inaugural Green €500m (WNG) 6NC5 Senior Preferred transaction (7 July)
  • Enel $4bn Multi-tranche 5/7/10/20yr Sustainability-Linked Bond (7 July)

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