Poste Italiane's branch network, BancoPosta, one of the biggest distributors of structured products in Italy, has closed 2009 with an annual volume of €3.35bn. Its latest product, Tasso Fisso BancoPosta 4.40%, however, was the provider's first fixed rate bond.
Maurizio Di Luzio, head of the wealth management team at BancoPosta, said the bank had wanted to diversify its offering, and was also mindful of the gradual shift in demand towards less complex and/or risky products. "At the end of 2008, we distributed the last tranche of Reload (our flagship product) and Top Ten, two structured bonds with a strong derivative feature. Then we began 2009 with Tasso Fisso Plus, a structured bond with a small derivative component and a strong fixed interest rate feature, and concluded the year with fixed rate bond Barclays 2009/2015 Tasso Fisso BancoPosta 4.40%," he said.
The product, Barclays 2009/2015 Tasso Fisso BancoPosta 4.40%, pays a 4.4% fixed annual coupon and returns capital at maturity. The product was very successful, closing its offer period after only ten days and collecting €900m from Italian investors. Including this product, BancoPosta raised an impressive €4.25bn for third-party-issued bonds. Di Luzio continued, "Barclays was selected largely because of its solidity."
BancoPosta has been one of the biggest distributors in the Italian market in recent years. In 2007, it distributed six structured bonds and in 2008, seven, for respective volumes of €5.47bn and €5.42bn. In 2009, the distributor launched only four structured bonds, raising €3.35bn, a reduction that will have a significant impact on the wider Italian structured products market, as will be reflected in our annual report.
"In the future, following our strategy of diversifying our offering, we plan to continue launching plain vanilla products. Moreover, since we are expecting interest rates to rise, we will consider offering our clients a 'personalised' floating rate bond, which will better fit Poste Italiane investors' requirements. Tasso Fisso Plus will probably continue to be our benchmark product, although we are considering modifying or restyling the derivative feature," added Di Luzio.
Poste Italiane's reliance on American banking counterparties has waned in the past couple of years, and in particular since the Lehman collapse. While in 2007 four out of six products were issued by an American bank (Goldman Sachs, Morgan Stanley and Merrill Lynch), in 2008 and 2009 all counterparties were European and predominantly Italian: five out of seven issues in 2008 and three out of four in 2009.
These products are available on the Italian database.