Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

UniCredit’s Asset-Backed Securities Buyback to Boost Capital

Sept. 12 (Bloomberg) -- UniCredit SpA offered to pay as much as 1 billion euros ($1.3 billion) to buy back asset-backed securities in the first deal of its kind by an Italian bank in more than two years.

Investors have until Sept. 24 to accept a cash offer equating to 37 percent to 96 percent of the 6 billion-euro face value of 22 securities, the Milan-based lender said in a statement yesterday. If acceptances exceed the offer, holders will be treated on a pro-rata basis, Italy’s biggest bank said.

Banks in peripheral European countries, including Spain’s Banco Bilbao Vizcaya Argentaria SA and Portugal’s Banco Comercial Portugues SA, repurchased about 11 billion euros of asset-backed bonds this year, according to Barclays Plc. Buying back the loans for less than face value allows UniCredit and other lenders to book capital gains similar to the discount.

“We can imagine similar deals for other strong banks out of Italy and the other peripheral countries,” said Dalibor Jarnevic, an asset backed securities trader at DZ Bank AG in Frankfurt.

UniCredit Chief Executive Officer Federico Ghizzoni is reducing risk and cutting costs as part of the bank’s five-year plan to restore profit. The bank posted a capital gain of 477 million euros after buying back 3 billion euros of Tier 1 and Tier 2 bonds in January.

“UniCredit has a strategic goal to optimize its balance sheet structure by offering investors the possibility to tender such securities in exchange for cash,” the bank said.

Unicredit repurchased asset backed securities with a face value of 2.1 billion euros in February 2010, the last such buyback by an Italian lender, according JPMorgan Chase & Co.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.