Italy 2-Year CTZ Auction

The CTZ or Zero Coupon Treasury Certificates are government bonds issued by the Italian government to finance the Public Debt. They have a maturity period of up to two years. In secondary markets, they are traded on the Bond and Government Securities Markets (MOT) for denominations starting at 1000 euros and multiples, while for denominations starting at 2.5 million euros they are traded on the MTS segment.

The profit from the CTZ derives from the difference between the nominal value of the security redeemed at maturity and the price that is paid at the time of subscription.

The CTZs have a duration of 24 months and the BOTs are similar, except for the fact that they have a duration of three, six or twelve months, and moreover only the BOTs have the advance taxation.

The return for the CTZs is therefore represented by the turnover that an investor will have in the future having kept the Treasury Bill (the "Buono del Tesoro" in Italian language) for its entire duration. All investors get the same rate at the highest accepted offer. The CTZs can be used analytically as an indicator for the government debt situation by monitoring the fluctuations in the efficiency, or by comparing the auction averages for the classification of the previous auctions of the same voucher, by the investors.