UniCredit announced yesterday evening, Tuesday 9 January 2024, that it has successfully placed a Tier 2 bond for an amount of 1 billion euros, intended for institutional investors.
The placement, we read in the press release released by the Italian bank led by CEO Andrea Orcel, reaffirmed the credit institution’s “solid investor base and its ability to access the market in different formats”.
Rated Baa1/BBB/BBB), the bond, with a maturity of 10 years and 3 months, callable after 5 years and 3 months, pays a fixed coupon of 5.375% until April 2029 and has an issue price of 99.847%, equivalent at a spread of 280 basis points compared to the reference swap rate.
UniCredit specified that, in the event that it does not exercise the call option, the coupon would be reset on the basis of the 5-year swap rate applicable at that time, increased by the initial spread.
“Given strong market interest and considerable order volume, spread guidance initially set at 315 basis points over mid-swap was ultimately reduced to 280 basis points.”
There was strong demand for the UniCredit bond. The requests came from more than 200 institutional investors, with orders exceeding 3 billion euros.
UniCredit Bank held the role of Global Coordinator and Joint Bookrunner together with Barclays, BNP, Mediobanca, Morgan Stanley, Santander and UBS.
The bond, which represents UniCredit’s first Tier 2 issue since 2020, is documented under the issuer’s Euro Medium Term Notes program and, due to its subordinated status, has the following expected ratings: Ba1 (Moody’s) / BB+ (S&P).
The bond will be included in UniCredit’s regulatory capital, contributing to the Total Capital Ratio. The listing will take place on the Luxembourg Stock Exchange