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Unicredit issues a 5.5 year Covered Bond (OBG) benchmark

UniCredit has today launched a new 5,5 year OBG benchmark for a total of Euro 750 million, setting a new reference point on the UniCredit covered bond curve.

The deal has encountered very strong interest from investors, bringing the final orderbook well above Euro 2 billion. Investors participation has been well diversified in terms of geography as well as investor type.

The bond - managed by UniCredit Corporate & Investment Banking together with Credit Agricole, Natixis and Societe Generale - was distributed to different institutional investors' categories such as funds (81.9%), insurance companies (11.5%), central banks (3.4%) and banks (3.2%). The demand was driven by a wide geographical diversification, with Italy being the major contributor (61.3%) together with Germany/Austria (16.2%), UK/Ireland (7%) Iberia (5.4%) and France (4%).

The issue is expected to be rated A/A2/AA+ by Fitch, Moody's and S&P and will pay a coupon equal to 4%, equivalent to 290 basis points over the swap rate with the same maturity and an issue price set at 99.88%. As result of the strong investor feedback the pricing guidance has been fixed at the low end of the initial spread indication of 290/295 bps, approximately 100 basis points below the equivalent maturity BTP at time of launch.

The issue launched today is part of the 35 billion Euro Programme announced in 2008 and based on a portfolio entirely composed by residential mortgages. For the benefit of the OBG holders (up to date 11.5 billion Euro issued including the present issue), the bank has already segregated around 18.1 billion Euro of residential mortgages originated by UniCredit S.p.A..

The global portfolio as of end of June 2012 comprises approximately 174,000 mortgages and has a very high granularity (with an average outstanding amount lower than ca. Euro 104.000). It has an average loan-to-value of approx 57%, a geographical concentration in northern and central Italy of 59% and 24% respectively. The Programme has been arranged by UniCredit Corporate & Investment Banking. Milan, 14th August 2012