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MPS has closed the placement of a 500 million euro four-year senior preferred bond. The operation collected orders for approximately 700 million euros from over 90 institutional investors, both Italian and foreign, confirming the appreciation of the market and the expansion of MPS’ institutional investor base: the reception by investors is further proof of the market appreciation for the bank’s improved credit profile. The bond will be listed on the Luxembourg Stock Exchange and will be redeemable after 3 years.
The coupon
Thanks to the strong and well-diversified demand, on a day with a high supply of issuers on the primary debt market, Montepaschi set the coupon at a final level of 6.75%, 12.5 basis points less than the initial indication price, in line with the previous issue which had a shorter duration, despite a context of higher rates. The credit spread has in fact narrowed by approximately 25 basis points.
The geographical distribution
The bond was placed with different types of institutional investors, such as Fund Managers, Banks and Private Banks, with the following geographical distribution: Italy (58%), United Kingdom (28%), France (6%), Germany, Austria and Switzerland (4%) and other countries (4%).
The issue confirms the renewed access to the institutional bond market after the first issue in February 2023, in line with the objectives of the 2023 funding plan and compliance with the MREL targets.
The placement was handled by Mediobanca, Bofa, JP Morgan, Morgan Stanley and MPS itself.