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UniCredit has issued its first bond in the US in a decade, in a test of investor demand for Italy’s largest bank as the country’s financial sector continues to struggle.
The bank has sold $2bn of dollar-denominated bonds, split between 5-year and 10-year maturities, at coupons of 3.8 per cent and 4.6 per cent respectively.
The bank said in a statement that due to high demand from investors, the spread over US Treasuries was tightened.
The issue follows the successful completion of a €13bn rights issue, which was seen as a pivotal moment for the future of the country’s struggling financial sector.
While UniCredit’s recent moves have been welcomed by investors, the broader Italian banking sector is still weighed down by €360bn of bad loans, of which €200bn are in default.
The bond sale represents a move to open up capital market funding in the US. UniCredit has been a major beneficiary of the recently concluded TLTRO programme from the European Central Bank, which provided cheap financing to banks. It took €24bn at the last auction in March.