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Sunday, July 23, 2017

UniCredit launches dual tranche three and 10 year covered bond benchmarks

UniCredit launched a dual tranche OBG benchmark with a three year floating-rate note for $14.9 million and a 10 year fixed rate note for $30 million.

The benchmark set a new reference point on the UniCredit covered bond curve.

Investors have shown an exceptional interest in the deal with participation seen from 250 investors reaching $120 million.

The positive feedback has resulted in the fixing of the price guidance of the three-year note at 57 basis points over 3m Euribor. This is lower than the initial indications equal to ca. 65 bps. It is 98 bps over the equivalent maturity mid swap for the 10 year bond, starting at the initial range of 105-110 bps.

The three year bond has an issue price set at 99.94 percent and will pay a coupon of 3m Euribor + 55bps. The distribution of the benchmark went to such categories as funds, banks and insurance companies with demand coming from Italy, Germany/Austria and France.

The issue launch is part of 2008's 35 billion Euro Programme, which is based on a portfolio entirely composed of residential mortgages.