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UniCredit issues a dual tranche 3 and 10 year Covered Bond (OBG) benchmarks for a total of Euro 1,5 Billion

UniCredit has launched today a dual tranche OBG benchmarks: a 3 year floating-rate note for Euro 500 million and a 10 year fixed rate note for Euro 1 billion, setting new reference points on  UniCredit covered bond curve.

 

The deal has encountered exceptional interest from investors, bringing the final orderbook to almost Euro 4 billion with a participation of around 250 investors.

 

Following the particularly positive feedback, the price guidance of the 3 year note was fixed at 57 basis points over 3m Euribor, well below the initial indications equal to ca. 65 bps and 98 bps over the equivalent maturity mid swap for the 10 year bond, starting from the initial range of 105/110bps.

 

 

The 3 year bond will pay a coupon of 3m Euribor +55bps with an issue price set at 99,94%. The benchmark was distributed to different institutional investors' categories such as funds (50%), banks (41%) and insurance companies (6%). The demand was coming from the following regions: Italy and Germany/Austria (30% both) and France (11%).

 

 

The 10 year bond will pay a coupon of 3% with an issue price set at 99,09% and a yield of around 80bps below the equivalent maturity BTP at time of launch. The issue was distributed to different institutional investors' categories such as insurance companies (35%), funds (32%) and banks (26%). The demand was driven by a wide geographical diversification, with France (33%), Germany/Austria (26%) and Italy and Benelux (9% both).

 

 

UniCredit Corporate & Investment Banking together with Credit Agricole, Credit Suisse, Danske Bank, Ing and Natixis have managed the placement acting as joint bookrunners. Both issues are expected to be rated AA/A2/A+ by S&P, Moody's and Fitch.

 

 

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 these issues, the OBG I Programme has 14.8 billion Euro outstanding), the bank has already segregated around 21.3 billion Euro of residential mortgages originated by UniCredit S.p.A..

 

 

The global portfolio at the beginning of September 2013 comprises approximately 206,000 mortgages and has a very high granularity (with an average outstanding amount of ca. Euro 95,000). It has an average loan-to-value of approx 54.42%, a geographical concentration in northern and central Italy of 58% and 23% respectively.

 

 

Milan, 15 January 2014