Italy’s Credito Emiliano is due to go on a roadshow in the coming weeks to provide investors with a credit update ahead of a possible debt capital markets transaction, and an official at the issuer told The CBR that the bank is updating its OBG programme and focussed on covered bonds.

Barclays, ING, Natixis, RBS and Société Générale have the roadshow mandate, which was announced today (Wednesday).

Daniele Morlini, head of investor relations at Credito Emiliano, told The Covered Bond Report that the bank is in the process of updating its covered bond programme, and expects this to be complete by the end of May or the beginning of June. The roadshow is intended to provide investors with a credit update and allow the issuer to gauge investors’ interest in participating in a bond issue from the bank, he said.

According to Morlini the issuer’s focus is on the covered bond market, although a senior unsecured issue could also make sense for a shorter dated maturity.

“It depends on the spread and investor feedback and we are not in a hurry in terms of liquidity,” he said. “But we can see more willingness in the market to buy covered bonds than senior unsecured, especially if the focus is on a longer duration.”

Credito Emiliano’s roadshow announcement comes a day after the banking group announced its Q1 2013 results, noting in a presentation that a recent reduction in the spread of BTPs over Bunds allows the issuer to consider returning to the institutional market to issue covered bonds.

In 10 years the spread of Italian government bonds over Bunds stood at around 265bp today, according to a syndicate banker, who said that the differential has been on a tightening trajectory since the end of April even though the spread is off recent tights.

There has been heavy peripheral supply recently, with Italy in the market today with a 30 year and Spain having tapped the market yesterday, and the syndicate official said this will have contributed to some softening.

Credito Emilano last tapped the public covered bond market in June 2011, when it sold a Eu500m three year issue.