EX-99.1 2 u55686exv99w1.htm EXHIBIT 1 EXHIBIT 1
Exhibit 1
Recent Developments update dated May 27, 2008
     The information included in this section supplements the information about the Republic of Italy that is contained in Exhibit D to the Republic’s annual report on Form 18-K, for the fiscal year ended December 31, 2006. To the extent that the information included in this section differs from the information set forth in the annual report, you should rely on the information in this section.
President, Government and General Elections
     Following the general elections held in April 2008, Mr. Silvio Berlusconi, leader of Il Popolo delle Libertá, Italy’s principal center-right party, was appointed to form a new Government, which was sworn in on May 12, 2008.
The Italian Economy
     Based on ISTAT data, in the third quarter of 2007, Italy recorded real GDP growth of 1.9 per cent, compared to the same period of the previous year. Italy’s seasonally adjusted average unemployment rate decreased to 6.5 per cent during the last quarter of 2007 from 6.7 per cent during the third quarter of 2007. Consumer prices, as measured by the harmonized EU consumer price index, increased at an annual rate of 3.6 per cent during the twelve months ended April 30, 2008.
Public Debt — Total Treasury Issues
     The following table shows the total of debt securities issued by the Treasury and outstanding as of the dates indicated. Total Treasury issues differ from Italy’s total public debt as the former do not include liabilities to holders of postal savings accounts, debt incurred by Ferrovie dello Stato S.p.A. and ANAS S.p.A. (Azienda Nazionale Autonoma delle Strade) and debt incurred by other state sector entities, other general government entities and other liabilities reclassified as general Government debt pursuant to Eurostat rulings.
                 
    December 31, 2007     March 31, 2008  
    (Millions of euro)  
Short term bonds (BOT)
     128,302       150,979  
Medium and long term bonds (initially issued in Italy)
     1,080,785       1,107,564  
External bonds (initially issued outside Italy)(1)
     69,314       70,180  
 
            
Total Treasury issues
     1,278,401       1,328,723  
 
            
 
(1)   Italy often enters into currency swap agreements in the ordinary course of the management of its debt. The total amount of external bonds shown above takes into account the effect of these arrangements and is not directly comparable to the total amounts of external bonds indicated in the table “External Bonds of the Treasury as of March 31, 2008” below, which do not take into account: (i) the effect of currency swaps and (ii) the amount of bonds outstanding under Italy’s Commercial Paper Program.
 
Source: Ministry of Economy and Finance
        The following table shows the external bonds of the Treasury issued and outstanding as of March 31, 2008.

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External Bonds of the Treasury
As of March 31, 2008
                                         
        Initial Public           Original Principal   Principal Amount   Equivalent
Title   Interest Rate(%)   Offering Price   Date of Issue   Maturity Date   Amount   Outstanding   in euro
 
                                        
US$(1)
                                         
3,500,000,000
  6.875%    98.725%    September 27, 1993   September 27, 2023     3,500,000,000       3,500,000,000       2,213,508,728  
1,500,000,000
  6.025%-6.88%    100.000%    March 5, 1996   Mar 5, 2004/12     1,500,000,000       1,500,000,000       948,646,598  
750,000,000
  5.81%-6,70%    100.000%    March 5, 1996   Mar 5, 2002/10     750,000,000       750,000,000       474,323,299  
1,500,000,000
  5.97%-6.25%    100.000%    December 20, 1996   Dec 20, 2004/12     1,500,000,000       1,500,000,000       948,646,598  
2,500,000,000
  6.00%    99.755%    May 29, 1998   May 29, 2008     2,500,000,000       2,500,000,000       1,581,077,663  
2,000,000,000
  6.00%    99.274%    February 22, 2001   February 22, 2011     2,000,000,000       2,000,000,000       1,264,862,130  
2,000,000,000
  5.625%    99.893%    March 1, 2002   June 15, 2012     2,000,000,000       2,000,000,000       1,264,862,130  
1,000,000,000
  5.625%    99.392%    May 8, 2002   June 15, 2012     1,000,000,000       1,000,000,000       632,431,065  
2,000,000,000
  5.375%    98.436%    February 27, 2003   June 15, 2033     2,000,000,000       2,000,000,000       1,264,862,130  
2,000,000,000
  4.375%    99.694%    February 27, 2003   June 15, 2013     2,000,000,000       2,000,000,000       1,264,862,130  
1,250,000,000
  3.25%    99.949%    May 6, 2003   May 6, 2008     1,250,000,000       1,250,000,000       790,538,831  
2,000,000,000
  2.50%    99.521%    July 3, 2003   July 15, 2008     2,000,000,000       2,000,000,000       1,264,862,130  
100,000,000
  4.17%    100.000%    November 14, 2003   November 15, 2010     100,000,000       100,000,000       63,243,107  
100,000,000
  4.06%    100.000%    December 9, 2003   December 9, 2010     100,000,000       100,000,000       63,243,107  
2,000,000,000
  3.25%    99.515%    March 3, 2004   May 15, 2009     2,000,000,000       2,000,000,000       1,264,862,130  
4,000,000,000
  4.50%    99.411%    January 21, 2005   January 21, 2015     4,000,000,000       4,000,000,000       2,529,724,260  
3,000,000,000
  4.00%    99.932%    May 9, 2005   June 16, 2008     3,000,000,000       3,000,000,000       1,897,293,195  
2,000,000,000
  4.75%    99.340%    January 25, 2006   January 25, 2016     2,000,000,000       2,000,000,000       1,264,862,130  
3,000,000,000
  5.25%    99.85%    September 20, 2006   September 20, 2016     3,000,000,000       3,000,000,000       1,897,293,195  
2,000,000,000
  5.375%    99.367%    June 12, 2007   June 12, 2017     2,000,000,000       2,000,000,000       1,264,862,130  
 
                                        
Euro(2)
                                        
2,500,000,000
  9.25%    98.160%    March 7, 1991   March 7, 2011     2,500,000,000       2,500,000,000       2,500,000,000  
1,022,583,762
  3 mth libor+ 0.0625%    99.89%    December 11, 1995   December 20, 2002/10     1,022,583,762       1,022,583,762       1,022,583,762  
567,225,000
  6.125%    100.790%    May 29, 1997   May 29, 2012     567,225,000       567,225,000       567,225,000  
60,000,000
  3 mth libor - 16 b.p.   99.610%    October 8, 1998   October 8, 2018     60,000,000       60,000,000       60,000,000  
300,000,000
  Index linked   101.425%    October 15, 1998   October 15, 2018     300,000,000       300,000,000       300,000,000  
1,000,000,000
  4.000%   99.950%    May 6, 1999   May 6, 2019     1,000,000,000       1,000,000,000       1,000,000,000  
1,000,000,000
  frn 30Y   101.600%    June 28, 1999   June 28, 2029     1,000,000,000       905,000,000       905,000,000  
1,000,000,000
  t. swap 30 - 0.91%   100.750%    August 30, 1999   August 30, 2019     1,000,000,000       1,000,000,000       1,000,000,000  
150,000,000
  Zero Coupon   100.000%    February 20, 2001   February 20, 2031     150,000,000       150,000,000       150,000,000  
3,000,000,000
  5.75%    100.040%    July 25, 2001   July 25, 2016     3,000,000,000       3,000,000,000       3,000,000,000  
400,000,000
  3 mth libor – 0.06%    100.000%    January 22, 2002   January 22, 2012     400,000,000       400,000,000       400,000,000  
150,000,000
  84.5% cms 10Y   100.00%    April 26, 2004   April 26, 2019     150,000,000       150,000,000       150,000,000  
300,000,000
  12 mth eubor + 0.10%    100.00%    May 31, 2005   May 31, 2035     300,000,000       300,000,000       300,000,000  
720,000,000
  3.546% until 2009   100.00%    June 2, 2005   June 2, 2029     720,000,000       720,000,000       720,000,000  
395,000,000
  3.523% until 2010   100.00%    June 2, 2005   June 2, 2030     395,000,000       395,000,000       395,000,000  
200,000,000
  85% * 10y Eurswap   100.00%    June 8, 2005   June 8, 2020     200,000,000       200,000,000       200,000,000  
2,500,000,000
  85% * 10y swap rate   100.00%    June 15, 2005   June 15, 2020     2,500,000,000       2,500,000,000       2,500,000,000  
300,000,000
  85.5% * 10y swap rate   100.00%    June 28, 2005   June 28, 2021     300,000,000       300,000,000       300,000,000  
200,000,000
  6 mth Eubor + 1.5%
(max 10x(cms10-cms2) 		  100.00%    November 9, 2005   November 9, 2025     200,000,000       200,000,000       200,000,000  
900,000,000
  6 mth Eubor + 0.04%    99.38357%    March 17, 2006   March 17, 2021     900,000,000       900,000,000       900,000,000  

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        Initial Public           Original Principal   Principal Amount   Equivalent
Title   Interest Rate(%)   Offering Price   Date of Issue   Maturity Date   Amount   Outstanding   in euro
 
                                        
1,000,000,000
  6 mth Eubor + 0.60%    99.8500%    March 22, 2006   March 22, 2018     1,000,000,000       1,000,000,000       1,000,000,000  
   192,000,000
  Zero Coupon   100.000%    March 28, 2006   March 28, 2036     192,000,000       192,000,000       192,000,000  
   300,000,000
  6 mth Eubor + 0.075%   100.000%    March 30, 2006   March 30, 2026     300,000,000       300,000,000       300,000,000  
   215,000,000
  5.07%/ 10y cms   100.000%    May 11, 2006   May 11, 2026     215,000,000       215,000,000       215,000,000  
1,000,000,000
  1.85% linked to EU inflation index   99.796065%    January 5, 2007   September 15, 2057     1,000,000,000       1,031,670,000       1,031,670,000  
   250,000,000
  2.00% linked to EU inflation index   99.02385%    March 30, 2007   September 15, 2062     250,000,000       257,975,000       257,975,000  
   160,000,000
  4.49%   98.86%    April 5, 2007   April 5, 2027     160,000,000       160,000,000       160,000,000  
   500,000,000
  2.20% linked to EU inflation index   98.862525%    January 23, 2008   September 15, 2058     500,000,000       506,715,000       506,715,000  
 
                                        
Swiss Francs(3)
                                        
ChF 1,000,000,000
  3.50%    102.900%    September 25, 1998   September 25, 2008     1,000,000,000       1,000,000,000       635,404,753  
ChF 1,500,000,000
  3.13%    99.825%    Jan 4,1999   July 15, 2010     1,500,000,000       1,500,000,000       953,107,129  
ChF 1,000,000,000
  2.00%    100.470%    January 30, 2003   April 30, 2009     1,000,000,000       1,000,000,000       635,404,753  
ChF 1,000,000,000
  2.75%    100.625%    July 1, 2004   July 1, 2011     1,000,000,000       1,000,000,000       635,404,753  
ChF 2,000,000,000
  2.50%    100.090%    February 2, 2005   March 2, 2015     2,000,000,000       2,000,000,000       1,270,809,506  
ChF 1,000,000,000
  2.50%    99.336%    January 30, 2006   January 30, 2018     1,000,000,000       1,000,000,000       635,404,753  
 
                                        
Pounds Sterling(4)
                                        
£400,000,000
  10.50%    100.875%    April 28, 1989   April 30, 2014     400,000,000       400,000,000       502,638,854  
£1,500,000,000
  6.0%    98.565%    August 4, 1998   August 4, 2028     1,500,000,000       1,500,000,000       1,884,895,702  
£250,000,000
  5.25%    99.476%    July 29, 2004   December 7, 2034     250000000       250000000       314,149,284  
 
                                        
Norwegian
Kroners(5)
                                        
NOK 2,000,000,000
  6.15%    100.000%    September 25, 2002   September 25, 2012     2,000,000,000       2,000,000,000       248,416,346  
NOK 2,000,000,000
  4.34%    100.000%    June 23, 2003   June 23, 2015     2,000,000,000       2,000,000,000       248,416,346  
 
                                        
Japanese Yen(6)
                                        
¥125,000,000,000
  5.50%    100.000%    December 15, 1994   December 15, 2014     125,000,000,000       125,000,000,000       794,306,412  
¥125,000,000,000
  4.50%    100.000%    June 8, 1995   June 8, 2015     125,000,000,000       125,000,000,000       794,306,412  
¥100,000,000,000
  3.70%    100.000%    November 14, 1996   November 14, 2016     100,000,000,000       100,000,000,000       635,645,129  
¥100,000,000,000
  3.45%    99.800%    March 24, 1997   March 24, 2017     100,000,000,000       100,000,000,000       635,645,129  
¥100,000,000,000
  1.80%    99.882%    February 23, 2000   February 23, 2010     100,000,000,000       100,000,000,000       635,645,129  
¥100,000,000,000
  0.65%    99.995%    April 14, 2004   March 20, 2009     100,000,000,000       100,000,000,000       635,645,129  
¥25,000,000,000
  2.87%    100.000%    May 18, 2006   May 18, 2036     25,000,000,000       25,000,000,000       158,861,282  
 
                                        
Australian $(7)
                                        
A$ 1,000,000,000
  5.88%    99.803%    February 27, 2004   8/14/2008     1,000,000,000       1,000,000,000       576,900,888  
 
                                        
Czech Koruna(8)
                                        
Czk 2,490,000,000
  4.36%    100.000%    October 3, 2007   October 3, 2017     2,490,000,000       2,490,000,000       98,283,008  
Czk 2,490,000,000
  4.40%    100.000%    October 3, 2007   October 3, 2019     2,490,000,000       2,490,000,000       98,283,008  
Czk 2,490,000,000
  4.41%    100.000%    October 3, 2007   October 3, 2019     2,490,000,000       2,490,000,000       98,283,008  
 
                                        
 
                                       
TOTAL OUTSTANDING
                                57,517,092,158 (9) 
 
                                       
 
(1)   U.S. dollar amounts have been converted into euro at $1.5812/€1.00, the exchange rate prevailing at March 31, 2008.

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(2)   External debt denominated in currencies of countries that have adopted the euro have been converted into euro at the fixed rate at which those currencies where converted into euro upon their issuing countries becoming members of the European Monetary Union.
 
(3)   Swiss Franc amounts have been converted into euro at ChF1.5738/€1.00, the exchange rate prevailing at March 31, 2008.
 
(4)   Pounds Sterling amounts have been converted into euro at £0.7958/€1.00, the exchange rate prevailing at March 31, 2008.
 
(5)   Norwegian Kroner amounts have been converted into euro at NOK8.051/€1.00, the exchange rate prevailing at March 31, 2008.
 
(6)   Japanese Yen amounts have been converted into euro at ¥157.37/€1.00, the exchange rate prevailing at March 31, 2008.
 
(7)   Australian Dollar amounts have been converted into euro at A$1.7334/€1.00, the exchange rate prevailing at March 31, 2008.
 
(8)   Czech Koruna amounts have been converted into euro at Czk25.335/€1.00, the exchange rate prevailing at March 31, 2008.
 
(9)   The amount of external bonds shown above does not take into account (i) approximately €2,964 million outstanding under Italy’s Commercial Paper Program and (ii) the effect of currency swaps that Italy often enters into in the ordinary course of the management of its debt. The following table summarizes the effects on the Treasury’s external bonds after giving effect to currency swaps.
                 
    As of March 31, 2008  
Currency   Before Swap     After Swap  
 
US Dollars
     41.96%       2.12%  
Euro
     35.24%     97.88%  
Swiss Francs
     8.28%     —     
Pounds Sterling
     4.69%     —     
Norwegian Kroner
     0.86%     —     
Japanese Yen
     7.45%     —     
Australian Dollar
     1.00%     —     
Czech Koruna
     0.51%     —     
 
Total External Bonds (in millions of Euro)
     57,517,092,158       67,073,294,622  
 
Source: Ministry of Economy and Finance

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