To attract retail investors Unicredit he came up with one emission not usual on the market, equipped with final coupon. The bond has a duration of 13 years and savers, who will be able to invest with a minimum cut from 10.000 euro, they will collect the yield indicated in a 4,60% gross all together with deadline.
On 10.000 euros final collection of 4.435 euros net
Let's see how the new bond works with Isin IT0005585853 and listed on the Mot and Eurotlx markets of the Italian Stock Exchange. Calculations in hand, on 11 March 2037 the investor will receive 100% of the nominal value plus a single coupon equal to 59,8% of the nominal value, deriving from the repetition of the simple (not compound) return of 4,60% for the 13 years of life of the title. So on an investment of 10.000 euros you know right away that the return will be 5.980 euros gross. One applies to this issue 26% taxation and therefore the net collected will be 4.425 €.
Watch out for the risk of inflation
The bond structure does not allow the issuer to repay the bond early. On the contrary, the investor can sell the security before the maturity with the calculation of the accrual, but obviously at the price that will be indicated by the market at that moment (therefore it is not necessarily 100.
However, the final return does not take inflation risk into account. Unicredit itself writes this in the bond's information prospectus. “The return of the nominal capital at maturity”, we read in the list of possible risks, “does not protect investors from the risk of inflation, i.e. it does not guarantee that the purchasing power of the invested capital is not affected by the increase in the general level of the prices of consumer products". Consequently, the note concludes, "the real return of the security, i.e. the return adjusted with respect to the inflation rate measured during the life of the security itself, could be negative"
The issue announced yesterday by UniCredit is the third in direct trading in 2024. A January Unicredit had issued a 10-year callable step down issue February a 13-year fix to floater which saw a stock market value of more than 80 million euros in the first two weeks.
