Unicredit issues a 12 year Covered Bond (OBG) benchmark
UniCredit has today launched a new 12 year OBG benchmark for a total of Euro 1.25 billion, setting a new reference point on the UniCredit covered bond curve.
The deal has encountered strong interest from investors, bringing the final orderbook well above Euro 4 billion. Over 160 investors participated, well diversified in terms of geographic as well as investor type.
The bond - managed by UniCredit Corporate & Investment Banking together with BNP Paribas, Credit Agricole, Royal Bank of Scotland and UBS - was distributed to different institutional investors' categories such as funds (69%), banks (17%) and insurance companies (13%). The demand was driven by a wide geographical diversification, with UK being the major contributor (32%) together with Germany (24%), France (15%) and Italy (12%).
The issue is expected to be rated AAA/Aaa/AAA by Fitch, Moody's and S&P and will pay a coupon equal to 5.250%, equivalent to 165 basis points over the swap rate with the same maturity and an issue price set at 99.305%. As result of the strong investor feedback the pricing guidance has been revised downward by 10 bps versus initial spread indication.
The issue launched today is part of the 20 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 8.60 billion Euro issued including the present issue), the bank has already segregated around 11.9 billion Euro of residential mortgages originated by UniCredit S.p.A..
The global portfolio as of end of September 2010 comprises approximately 105,000 mortgages and has a very high granularity (with an average outstanding amount lower than Euro 110.000). It has an average loan-to-value of approx 63%, a geographical concentration in northern and central Italy of 55% and 23% respectively. The Programme has been arranged by UniCredit Corporate & Investment Banking.
Milan, 1st February 2011
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