UBI tapped by Eu250m a Eu1bn January 2023 OBG today (Wednesday) at one of the tightest Italian spreads, with the trade’s limited size allowing the issuer to also fix the spread well inside recent new benchmarks from other Italian issuers, according to one of the leads.

UBI Banca leads Commerzbank and Société Générale reopened the Eu1bn January 2023 obbligazioni bancarie garantite (OBG) with guidance of the 6bp over mid-swaps area this morning. The spread was then set at 6bp and the size at Eu250m.

The deal was quoted at minus 2bp-1bp, mid, pre-announcement, according to a syndicate banker at one of the leads.

The original Eu750m issue was priced at 36bp over mid-swaps in October 2015, and was tapped by Eu250m on 9 June at a spread of 13bp – which was at the time described as one of the tightest ever OBG spreads seen on the primary market.

“I think this is the tightest-priced Italian ever,” said the lead syndicate banker. “I’m always cautious about saying ever, but this really does look to be the tightest.”

The last benchmark covered bond offering from Italy was a dual tranche issue for Cariparma on Wednesday of last week (5 October), which comprised a Eu750m eight year tranche priced at 21bp over mid-swaps and a Eu750m 15 year tranche at 42bp.

The only other benchmark Italian supply since UBI tapped the January 2023s in June was a Eu1bn long 10 year issue for UniCredit on 24 August, priced at 20bp, and a Eu1bn 10 year for UBI on 5 September at 19bp.

“The tap offers a reasonable pick-up versus the outstanding bonds, but of course if you look at the levels at which the recent Cariparma and UBI trades were priced it still looks pretty rich,” said the lead syndicate banker. “That was simply dedicated to the small size of the transaction.”

A referendum on Italy’s constitution is planned for 4 December, and bankers said growing uncertainty in the run-up to the vote could impede Italian issuers’ access to markets.