UniCredit has today launched a new 7 year OBG benchmark for a total of Euro 1 billion, setting a new reference point on the UniCredit covered bond curve.
The deal has encountered exceptional interest from investors, bringing the final orderbook well in excess of Euro 6 billion. The participation of more than 300 investors has been well diversified in terms of geography as well as investor type.
The bond - managed by UniCredit Corporate & Investment Banking together with Banca IMI, Lloyds, Natixis and RBS - was distributed to different institutional investors' categories such as funds (54%), banks (30%) and insurance companies (12%). The demand was driven by a wide geographical diversification, with Germany/Austria being the major contributor (37%) together with Italy (18%), France (15%), UK/Ireland (11%) and Benelux (6%).
The issue is expected to be rated AA+/A2/A by S&P, Moody's and Fitch and will pay a coupon of 2.75% with an issue price set at 99.796%, resulting in a yield to maturity equal to 150 basis points over the swap rate. As result of the strong investor feedback the pricing guidance has been well inside the initial spread indication of 160/165 bps, approximately 95 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 of residential mortgages. For the benefit of the OBG holders (including this issue, the OBG I Programme has 12.7 billion Euro outstanding), the bank has already segregated around 21.2 billion Euro of residential mortgages originated by UniCredit S.p.A..
The global portfolio as of beginning of October 2012 comprises approximately 201,000 mortgages and has a very high granularity (with an average outstanding amount of ca. Euro 101.000). It has an average loan-to-value of approx 56%, a geographical concentration in northern and central Italy of 58% and 21% respectively. The Programme has been arranged by UniCredit Corporate & Investment Banking.
Milan, 7th January 2013