High Demand for LD239-Compliant Italian Yankee Bonds
Direct Italian Yankee bond issuances have seen a remarkable beginning to 2013. Intesa Sanpaolo’s newest Yankee bond offering, issued under the provisions of Legislative Decree 239, represents the largest senior debt issuance by an Italian financial issuer into the US market, and has attracted unexpectedly high market demand:
“The $3.5 billion Yankee offering from Italy's Intesa was almost six times subscribed.” CNBC
“A year ago, a Yankee bond issue from an Italian bank would have been unheard of, but Italian bank Intesa Sanpaolo issued a $3.5bn bond on January 7, receiving more than 430 orders for about $11bn, according to the bank.” Financial News
“Intesa Sanpaolo SpA (ISP.MI) said Tuesday it had sold $3.5 billion in bonds on the U.S. market, meeting high demand for what the bank said was the largest European financial issue denominated in dollars in two years.” The Wall Street Journal
“In the rush for high returns, some US investors are snapping up the new debt issues of Eurozone banks, returning to a sector they have shunned for the past few years amid the region’s debt crisis.”, Financial Times
The strong demand is even more noteworthy considering the increase of the withholding tax rate for non-certified holders of LD239-compliant securities from 12.5% to 20% last year; an increase which has no impact on properly certified investors. The Yankee market is clearly more than ready to comply with the domestic legislation of the issuer’s tax domicile.
Currently, US$ 8.3bn of outstanding Italian Yankee debt is LD239-compliant. A flurry of new laws in Italy has paved the way for further debt issuances placed directly in a foreign domestic market:
The scope of LD239 has been expanded to include commercial paper and hybrid instruments;
Non-listed companies can also utilise the provisions of LD239; and
A recently signed tax treaty with Hong Kong will lead to its inclusion in the White List.
Acupay acts as the tax compliance agent on all direct LD239-compliant Italian Yankee bond issuances and provides cross-border withholding tax solutions on over US$ 264bn of securities worldwide.
To request more information, please contact product@acupay.com.