Banco BPM, issued AT1 bonds for 300 million. Orders for 1.35 billion

Banco BPM covered bonds placed for 500 million

(Finance) – BPM desk issued one Additional Tier 1 capital instrument with perpetual duration and “callable” starting from the fifth year, for an amount equal to 300 million euros. Orders exceeded 1.35 billion euros. At the same time, it announced a repurchase offer of a perpetual bond with a total outstanding principal amount of €300 million (ISIN XS1984319316).

The security, intended for institutional investors, was issued at par fixed coupon at 9.5% until May 24, 2029, payable semi-annually; if the issuer decides not to exercise the early repayment option, the coupon will be redetermined on the basis of the 5-year euro swap rate at the time of the recalculation date, increased by a spread equal to 667.3 bps and will remain fixed for the next 5 years (until the next recalculation date).

The payment of the coupon is totally discretionary and subject to certain limitations. The security also provides for the temporary reduction of the nominal value if the Group’s CET1 ratio falls below 5.125%.

The investors who participated in the operation are mainly fund managers (86%), banks (6%) and insurance and pension funds (6%), while the geographical distribution sees the prevalent presence of foreign investors (including France with 27% , United Kingdom and Ireland with 15%) and Italy (36%).

“The positive outcome of today’s issue, together with the announcement of the buyback offer on AT1 securities, allows the bank to maintain a capital structure at optimal levels which remains among the best on the market”, we read in a note.

Morgan Stanley acted in the capacity of Sole Global Coordinator; Akros Bank, Barclays, Citigroup, Crédit Agricole, Goldman Sachs and Morgan Stanley acted as Joint Bookrunners.