On Tuesday Unicredit placed a new bond issue on the market. These are Additional Tier 1 bonds intended for institutional investors. The institute sold all the securities issued, for a total amount of one billion euros. Demand was very high, reaching nearly five billion, with over 300 interested investors.
“Unicredit – reads the Bank's press release – has decided to proceed with the operation in order to continue to strengthen its capital base by exploiting the positive market window”.
In detail, the Additional Tier 1 bonds will contribute to strengthening the Tier 1 Ratio by approximately 27 basis points. The issue is part of Unicredit's funding plan for 2019.
Faced with particularly sustained demand, the Bank was able to lower the guidance initially set at around 8%. The coupon was thus fixed at 7,50% until June 2026. After this term, if the early repayment option is not exercised, the coupon will be redefined at 5-year intervals based on the swap rate of the same maturity in force at the time , increased by 733,4 basis points, calculated on an annual basis and restated on a half-yearly basis.
The bonds are perpetual (with maturity linked to the statutory duration of UniCredit) and can be recalled by the issuer on 3 June 2026 and, subsequently, on each coupon payment date.
The bonds were distributed to various categories of institutional investors such as funds (90%), banks/private banks (7%) and insurance companies (3%). Demand came mainly from the UK (65%), Italy (9%), France (6%) and US-offshore (4%).
The securities are rated 'B+' by Fitch.
