UniCredit has today launched a "lower tier 2" subordinated benchmark denominated in US Dollar, with a 10 year maturity (callable after 5 years) and a volume of USD 750 million (equivalent to approximately Euro 575 million), targeted to non US investors in Europe and Asia.
Following a book building process led by BNP, Citigroup and UniCredit Corporate & Investment Banking, the coupon has been set at 6.375% starting from an initial guidance put at 6.75% area, which has been significantly revised downward thanks to a very positive response from the market. Total demand was in fact in excess of USD 3 bln, with the involvement of over 250 accounts.
The bond has been distributed to different institutional investors' categories such as managed funds (74%), private banks (11%) and banks (6%). The demand was driven by UK (38%), Italy (10%); US off shore (10%) Switzerland (9%), France (8%), Asia (6%).
The issue is expected to be rated BBB/Baa3/BBB by S&P, Moody's and Fitch In light of the subordinated status, and will pay a coupon of 6.375% with an issue price set at par, resulting in a yield to maturity equal to 551 basis points over the USD swap rate.
The bond is documented under the issuer's Euro Medium Term Notes Program. The bond will be computed in the Tier 2 regulatory capital of UniCredit, contributing to the Total Capital Ratio. Listing will be on the Luxembourg Stock Exchange.