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. |
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| (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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