UniCredit braves higher costs to place six-year bond
Reuters
Published Jan 10, 2023 18:02
MILAN (Reuters) - UniCredit (LON:0RLS) on Tuesday met strong demand for a 1 billion euro ($1.1 billion) senior bond, when it became the first Italian bank to brave sharply higher funding costs driven by rising interest rates.
UniCredit placed a six-year senior preferred bond at an annual coupon of 4.8%, it said in a statement. A year ago, it had sold a bond with the same maturity at 0.925%.
The bond pays a spread of 190 basis points (bps) over the five-year mid-swap rate. That is significantly lower than an initial indication of 220 bps, but it compares with 85 basis points last year.
Both bonds have a one-time issuer call at year five, giving UniCredit the option to redeem it.
UniCredit said demand totalled 2.85 billion euros from more than 200 investors.
Funds bought 62% of the issue with banks, including private ones, taking another 16% and insurers 12%.
Italy and France each took roughly a quarter of the issue, followed by Britain with 15%.
UniCredit Bank AG acted as sole bookrunner and lead manager. BNP Paribas (EPA:BNPP), Mediobanca, Natwest (LON:NWG) and Santander (BME:SAN) acted as joint lead managers.
($1 = 0.9314 euros)
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Written By: Reuters
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