Those seeking a return above 4% often encounter subordinated bank bonds commonly issued by Italian banks. These five demonstrate how generous coupons hide complex structures and real risks.
Banks have a flaw that many find wonderful: attracting capital by offering attractive coupon rates. They have always been at the top of dividend yield rankings and, at the same time, frequently issue bonds listed on the MOT that aim to entice even the most savvy investor.
In this historical moment, marked by still-high rates and shifting yield curves, there are 5 bank bonds that stand out with effective yields above 4%. We’re not talking about simple or low-risk securities, but more complex instruments that offer higher yields to compensate for higher risk, but Tier 2 instruments come with specific regulatory features and risks.
Let’s look at these issues together, because behind every high yield there’s always a risky counterpart.
Credem XS2488465423
This Hold Social Mc Ot32 Tier 2 Call EUR issue maturing on 05/10/2032 and an effective yield of 6.17% illustrates the structural complexity of Tier 2 instruments. The term Tier 2 refers to a category of subordinated capital: in the event of a bank’s default or liquidation, these securities are repaid after the senior bonds and before the shares. Furthermore, the Call clause means that the issuer can early redeem the security on specified dates.
UniCredit IT0005638371
The OC Mar38 Call Eur, maturing March 10, 2038, offers a yield of 4.55%. The variable coupon is often indexed to the Euribor or a fixed spread. A long, subordinated security, it carries high volatility and the possibility that the coupon may be suspended in cases of financial distress or regulatory restrictions.
Intesa Sanpaolo IT0005508707
The TV Eur3m+4.15 Ot32 Sub Tier 2 matures on October 14, 2032 and yields 4.25%. This second-tier Subordinated contributes to the bank’s Total Capital Ratio. The coupon, pegged to the quarterly Euribor plus a spread, benefits from high interest rates but is exposed to fluctuations.
Intesa Sanpaolo IT0005495244
The TV Eur3m+3.45 Gn32 Sub Tier 2 maturing June 16, 2032, offers a yield of 4.23%. The same applies to subordination and callable: there is reduced visibility on the actual holding period due to the call option, and this affects your duration and reinvestment management.
Mediobanca IT0005640260
The MC Sep35 Tier 2 Call, maturing September 18, 2035, has an effective yield of 4.07%. Despite being issued by a solid name like Mediobanca, it remains a subordinated security with greater risk than a senior bond.
Now that you’ve seen these names and numbers, you’ll understand that, although they are bonds and although they come from solid banking issuers, bond characteristics and risk profiles can vary significantly. Those with higher yields carry more complex structures, subordination clauses, and early repayment options that must be fully understood. Investors should not rely solely on the coupon rate when assessing a bond’s attractiveness: study carefully, evaluate your risk tolerance, and remember that behind every "risk-free" there’s always a detail that can make the difference between a good investment and an unpleasant surprise. Original article published on Money.it Italy 2025-07-20 07:53:00. Original title: 5 obbligazioni bancarie con rendimento superiore al 4%
