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UniCredit sets out €13B rights offering details

UniCredit SpA said Feb. 1 that its board approved the terms of its up to €13 billion rights issue, which will feature an issuance of a maximum of 1,606,876,817 new ordinary shares at €8.09 apiece, subject to regulatory approvals.

The share issuance will be carried out at a subscription ratio of 13 new ordinary shares for every 5 ordinary and/or savings shares held.

The subscription price of €8.09 per share reflects a discount of approximately 38% to the theoretical ex-rights market price.

Subject to regulatory approvals, UniCredit expects that subscription rights of new shares could be exercised from Feb. 6 to Feb. 23 in Italy and Germany and from Feb. 8 to Feb. 22 in Poland.

The company also signed an underwriting agreement related to the transaction.

UniCredit Corporate & Investment Banking, Morgan Stanley and UBS Investment Bank will act as structuring advisers for the offering, and, together with BofA Merrill Lynch, J.P. Morgan and Mediobanca, will act as joint global coordinators and joint book runners. Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs International and HSBC will act as co-global coordinators and joint book runners.

Banca IMI, Banco Santander, Barclays, BBVA, BNP Paribas, Commerzbank, Crédit Agricole CIB, Natixis and Société Générale will be joint book runners, while ABN AMRO, Banca Akros and Macquarie Capital will act as co-book runners. Danske Bank will be co-lead manager, with CaixaBank, Equita SIM, Haitong, Jefferies, RBC Capital Markets, SMBC Nikko and Keefe Bruyette & Woods serving as co-managers.

The settlement of the transaction is planned on Feb. 23 for rights that are exercised, and before March 10 in respect of any remaining part of the offering.

Meanwhile, UniCredit's initiative to accelerate the reduction of gross bad loans amounting to €17.7 billion, dubbed Project FINO, is now moving into the execution phase. The project is expected to complete in 2017.

The two-phase de-risking of gross bad loans will be effected through a securitized portfolio of which UniCredit will sell a majority vertical tranche to PIMCO and Fortress in phase 1, at the latest in the second half. The full disposal, or phase 2, will take place during the period of the Transform 2019 plan.