BLBG:UniCredit Offers to Buy Back 3 Billion Euro of Bonds to Increase Capital
UniCredit SpA (UCG), Italy’s biggest bank, offered to buy back as much as 3 billion euros ($3.9 billion) of bonds as part of its plan to boost capital.
“The purpose of the invitation is to support UniCredit’s strategy for optimizing its capital structure,” the Milan-based lender said in a statement today. The buyback “will generate profits and thereby increase core tier 1 capital,” it said.
UniCredit submitted the offer to eligible holders of 10 bonds to sell their securities to the bank for cash. The purchase involves tier 1 and tier 2 bonds, with 4.3 billion euros denominated in euros and 1.1 billion euros in pounds, the bank said. Bondholders, who have until Feb. 3 to accept the offer, will receive 50 percent to 87 percent of the face value, depending on the securities.
Chief Executive Officer Federico Ghizzoni is raising money to plug a capital shortfall and comply with European Banking Authority targets. The bank is selling 7.5 billion euros of new shares to strengthen its finances.
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
