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Credem issues €750M in Covered Bonds
> 15 January 2019

Credem has successfully completed the placement of € 750 million in covered bonds, within the cadre of the Guaranteed Bank Bonds ("OBG") program, updated on 21 December 2018, for a maximum amount of € 5 billion and entirely backed by the Group's prime residential mortgages. The funds raised will be used for Credem's ordinary banking and credit activity.

The transaction represents the first OBG issue placed by an Italian bank since July 2018, and the first public issue denominated in Euro by an Italian bank in 2019.

The issued OBGs, whose expected rating is "Aa3" by Moody's and "AA" by Fitch, have a duration of 5 years and carry a 1.255% annual gross coupon, corresponding to 95 basis points above the midswap rate. The date of dividend and settlement of the transaction is January 17, 2019.

Final pricing represents a discount of 84.9 bps compared to the Italian government's BTP curve.

Against the € 750 million placed, Credem noted that the bonds attracted orders of over €925 million from more than 70 investors. Requests from foreign institutional investors were significant: 52% of the issue was placed abroad, mainly in Germany, Austria and Switzerland (26%), Nordic countries (9%), France (7%), United Kingdom (4%), Benelux (4%) as well as Spain and Portugal (2%). 48% of the issue was placed with Italian institutional investors.

With regard to the category type represented by main investors, banks make up 50%, fund management companies 42%, and insurance companies and pension funds 3%. Requests were also received from the central banks for a 5% stake.

A syndicate comprising Barclays, Crédit Agricole CIB, SG CIB and UniCredit served as placement manager on the transaction.

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