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Guarantor: UniCredito Italiano SpA
Rating: A1/A/A
Tranche 1: Eu750m tier one capital
Maturity: perpetual
Issue/re-offer price: 100.00
Coupon: 4.028% until 27 October 2015; three month Euribor plus 176bp thereafter
Call option: at par on 27 October 2015
Spread at re-offer: 76bp over mid-swaps; 86bp over the 3.25% July 2015 Bund
Joint books: HVB, JP Morgan, Merrill Lynch, UBM
Tranche 2: pound(s)300m tier one capital
Maturity: perpetual
Issue/re-offer price: 100.00
Coupon: 5.396% until 27 October 2015; three month Libor plus 176bp thereafter
Call option: at par on 27 October 2015
Spread at re-offer: 107bp over the 4.75% over the September 2015 Gilt
Joint books: HSBC, JP Morgan, Merrill Lynch
Launch date: Wednesday 5 October
Payment date: 27 October
Bookrunners' comment:
This acquisition related tier one financing had a tremendous reception from the market. It is the largest ever tier one financing by an Italian bank and marks the return of UniCredito to the tier one market after an absence of five years.
There is a minimal arbitrage between euros and sterling, but the use of the two currencies offers excellent investor diversification and the issuer was keen to take advantage of that.
The transaction was roadshowed over four days last week across continental Europe and the UK. The roadshow finished on Friday and we then went out with initial price talk mid-Monday afternoon.
Partly because the deal had been so eagerly awaited the book came together very quickly on Monday evening through Tuesday.
The initial guidance was arrived at by considering several factors. One was the appropriate multiples of where the bank's 10 year CDS trade and we looked at similarly sized deals in the market. Because of the extensive roadshow we also had a lot of feedback about where investors found value in the trade.
There were significant levels of oversubscription on both tranches, with some Eu5bn of interest at the initial...