UniCredit Czech & Slovakia eyes more after Eu800m first
UniCredit Bank Czech Republic & Slovakia sold its first international issue of mortgage covered bonds off a new EMTN programme today (Friday), a Eu800m (Ck21.9bn) five year deal under Czech legislation, and plans to explore the potential for issuance targeted at international investors.
UniCredit, Prague
The Czech and Slovak entities of UniCredit were merged into a Czech entity in November 2012 and at the beginning of this month were given the new, combined name of UniCredit Bank Czech Republic & Slovakia, a.s.
The issuer has previously sold mortgage covered bonds – hypoteční zástavní listy – under Czech legislation, but these have been local market issues because not until a change to the Czech Bond Act in August 2012 could issuance be sold in euros under English law to foreign accounts (see here for further details).
According to Štepán Nývlt, head of debt origination/structuring and bond sales at UniCredit Bank Czech Republic & Slovakia, the issuer has sold euro denominated private placements locally before, but the new issue is its biggest in euros and the first in the international market. The new issue was sold to Czech accounts, but international investors could be targeted in future, he said.
“We would like to start discussions regarding this topic at the beginning of next year,” Nývlt told The Covered Bond Report, “as we would like to see the potential in the euro market for Czech issuers.”
According to a syndicate banker at lead manager UniCredit, the Eu800m 1.875% December 2018 issue was priced at mid-swaps plus 80bp. HSH Nordbank and NordLB were co-managers.
The pricing of mid-swaps plus 80bp was equivalent to 45bp-50bp over Czech government bonds, he added.
The covered bonds are rated A3 by Moody’s. They are governed by English law and listed in Luxembourg.
UniCredit Bank Czech Republic & Slovakia is the fifth issuer within the banking group to have issued euro covered bonds, the others being UniCredit SpA of Italy, UniCredit Bank (AG) of Germany, UniCredit Bank Austria AG, and UniCredit Jelzalogbank of Hungary.
