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UniCredit: New ?Lower Tier 2? subordinated bond

UniCredito Italiano today launched a new "Lower Tier 2" subordinated bond for a total size of 1.5 billion Euro in the Euro market. The bond has a final maturity of 10 years with a call option after 5 years.
The issue, with HVB, JP Morgan and UBM acting as joint lead managers, is divided in two tranches: a 500 million Euro fixed rate (Yield to Maturity 4.219% corresponding to Mid swap + 34 bps) and a 1 billion Floating Rate Note at a spread of Euribor + 33 bps.
The demand, well exceeding the final issue size, had the following composition:

- Fixed Rate Tranche (asset managers 47%, banks 32%, insurance companies 13%) coming from different countries throughout Europe: UK (30%), Benelux (25%) and Italy (14%)

- Floating Rate Tranche (banks 43%, asset managers 38%, insurance companies 8%) with geografic allocation as follows: UK (32%), Italy (26%), France (18%) and Germany (14%).
The new bond will be issued out of the Euro Medium Term Notes Programme, with listing on the Luxembourg Stock Exchange. Expected ratings are A2/A/A by Moody's, Standard & Poor's and Fitch. 

The dual tranche issue will establish a new benchmark on the UniCredit subordinated credit curve.

Milan, September 6, 2006


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