In reply to A newbie all over again! by Annec
In reply to A newbie all over again! by Annec
Hi Juliancoll,
You've got them. I've tried to Google them for info in Italian and in English but I'm not getting very far. I have seen some on ebay but they are cashed ones, and, as these are not, in theory they should still have a value, I am lothed to let them go for nothing.
I do hope that you can find out more than I have been able to.
Yvonne
In reply to A newbie all over again! by Annec
This describes the 'scam' - [although it was legal, so probably is not strictly a scam]
Financial trades Why didn't I think of that?
Dec 16th 2004 From The Economist print edition
Were these the best financial trades ever carried out?
………In 1992 when the Italian government changed its previously lax rules on
withholding tax for Eurobonds. At that time some specialist teams in London and
other big financial centres did nothing but seek out tax arbitrages: by buying this
bond here and moving it there,...........Among them was Ludovico Filotti, who worked for Barings. In 1993Mr Filotti was on holiday in Italy. Reading the local newspaper,
something caught his eye. An advertisement was encouraging
companies to buy bonds issued by Italy's Post Office. These bonds
were postal savings bonds, rather like Britain's national savings
certificates, and carried the guarantee of the Italian state. Mr Filotti
was curious: normally such bonds would only be for retail investors,
so he wondered on what terms companies could invest. Back in
Britain, he sent his Italian father the equivalent of £100 and asked
him to nip down to a post office to buy a bond certificate so that he
could study the small print on the bond.
What he found was encouraging. The postal bonds were “zero
coupon”, that is, unlike most bonds, which pay annual interest
instalments, they would pay nothing until they matured, so investors
would have to wait a set period before pocketing their returns and
recovering their original investment. The bonds promised a return of
three times the initial investment after 12 years—a rate equivalent
to 9.6% a year.
Back at his bank, Mr Filotti explained his discovery to a colleague,
John Hunter, who realised that this highly attractive rate would be
even more so if the equally juicy rates on Italian-government bonds
were to fall. ....[and]......., in the summer of 1996, interst ratesstarted to fall dramatically. Suddenly, the Post Office trade was on. Mr Hunter persuaded his new employer, a big Japanese bank, to buy $50m of the postal bonds.
Mr Filotti, who had also gone to work at the same Japanese bank, flew to Italy and,
escorted by police, carried a banker's draft for the equivalent of $50m into a post
office. Queuing up alongside pensioners claiming their modest weekly infusion, he
exchanged the draft for a savings bond. Soon the certificate was safely lodged in
London.
Mr Hunter, however, was unable to persuade his conservative masters to go further.
No matter: he sold the idea for the trade, first to a single rival bank, then to several
others. This set off a mad rush to buy the bonds before the opportunity disappeared.
Bankers flew in droves to Italy, jostling to be in front of each other in the queue. In
double-quick time UBS bought over $1 billion-worth of the bonds. CSFB bought the
most, but, according to International Financing Review, a trade magazine, later gave
back its profits when the Italian government threatened to withhold lucrative
mandates for privatisations. Nomura made the biggest single purchase, plonking
down $1.1 billion on the counter of a bemused clerk, who duly filled out a certificate
for more than a trillion lire.
Of course, it could not last. After $3.6 billion of the bonds had been issued in the
space of a few days, the Italian government suddenly put a ceiling on the amount
that could be bought and made threats to the banks' future fee income. Too bad. Mr
Hunter, however, is now the chief executive of Brains, a specialist broker that tries to
make money by selling clever ideas to other traders.
In reply to A newbie all over again! by Annec
[quote=craftfairy;92484]
Does anyone know if they are of any value as antiques or if it is possible to cash them in?
Yvonne[/quote]
There was at least one revaluation of the Lira during the 1970s. So whatever the face value is you'll need to divide by some factor.
Being pre-war you'll likely have a few adjustments to get to "modern" lira.
In reply to A newbie all over again! by Annec
Sorry, but this was all I could find. It may be worth contacting them to find out more. Good luck.
[url=http://www.scripophily.net/reitbupofr50.html]Repubblica Italiana Buono Postale Fruttifero 250.000 Lire - Italian Postal Money Order[/url]
In reply to A newbie all over again! by Annec
Try this.
[url=http://www.italia.gov.it/servlet/ContentServer?pagename=e-Italia%2Finnerpage&canale=1147958714289&categoria=1147958715692&nodo=1147958715722]Italia.gov.it[/url]
Google "Repubblica Italiana Buono Postale Fruttifero" and see what else comes up.
Are these bonds the postal savings bonds, like national savings certificates? Do they have a picture of a farmer (or something like that) on them? If so, as you say, they would pay nothing until they matured, so you would have to wait a set period before getting a return plus your original investment.
I think these bonds came in 250,000, 500,000 and 1,000,000 lire denominations and for some reason I seem to remember that they cant be cashed now, but I suppose there is a market for them. I also seem to remember some type of "scandal" involving Italian bonds a few years ago.
Will try to hunt down the info. - Google should help.