Banks return to successfully bet on bonds.
Unicredit SpA has successfully placed a 5-year Senior Non-Preferred bond for an amount equal to 1,5 billion euro, intended for institutional investors.
This bond represents the first transaction in Italy following the recent introduction of Senior Non-Preferred debt securities (second tier unsecured debt instruments), approved by the Italian Government's 2018 Budget Law.
The transaction has received an exceptional response from more than 250 leading investors, with orders for approximately 4,5 billion euros raised during the book building process.
Thanks to this, the spread initially communicated in the “high-80s” area with respect to the 5-year swap rate was first revised to the “75 area” and finally fixed at 70 bps. The bond pays an annual coupon of 1,00% with an issue price of 99,651%.
The bond was placed with different categories of investors such as: funds (67%), banks (18%) and insurance companies/pension funds (8%). Demand was characterized by a broad geographic diversification with UK/Ireland (22%), France (20%), Italy (15%) and Germany/Austria (10%).
In turn, Monte dei Paschi returned to the market by placing a subordinated bond with a fixed-rate Tier 2 issue and a 10-year maturity (however repayable in advance from the fifth year) for an amount of 750 million. The bond pays a fixed coupon of 5,375, which is equivalent to a spread of 500,5 basis points over the 5-year swap rate.
Investor demand for the new Monte dei Paschi bond was 3,6 times higher than supply.
