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UniCredit prices €1B AT1

UniCredit SpA issued €1 billion of Additional Tier 1 debt, bank-specific securities that can be converted into equity or written off if the lender runs into trouble.

The notes have a temporary write-down trigger of 5.125%, meaning that should UniCredit's common equity Tier 1 ratio fall below that level, the bond would be temporarily written down to cure the breach. The notes will carry a coupon of 5.375% until their first call date of June 3, 2025, after which if the notes are not redeemed, the coupon will adjust to the prevailing five-year midswap rate plus 492.5 basis points.

The bank received €2.2 billion of orders for the notes, allowing it to tighten the coupon from initial guidance of 5.625%. UniCredit noted that it now needs to raise only a further €750 million in AT1 capital to meet its goal of €3.5 billion between 2017 and 2019.