The source was confirming a report in Italy's Il Sole 24 Ore
daily. UniCredit and Pimco declined to comment.
UniCredit is Italy's only globally systemically important bank
and as such subject to rules that require lenders to issue
securities that can be written down or converted into equity to
cover potential losses.
A sell-off of Italian assets under a eurosceptic government has
sent borrowing costs soaring for the country's lenders and shut
all but the strongest names out of international funding
markets.
UniCredit took advantage of a partial respite in market
pressures this week following reports that the government may
seek a compromise with European Union authorities in a stand-off
over next year's budget.
Since the sell-off started in mid-May only rival heavyweight
Intesa SanPaolo had issued unsecured debt.
In January, UniCredit had sold Italy's first senior-non
preferred bond placing 1.5 billion euros in five-year notes at a
premium of 70 basis points over the swap rate.
That bond now trades at 320 basis points (bps) over the swap
rate. When adjusting the duration of the two issues to make them
equivalent, the latest bond, sold at a 420 bps spread over the
swap rate, offers an 80 bps premium over the previous one.
A Milan-based debt banker said the decision to place the bond
with a single buyer had spared UniCredit the need for roadshow
presentations with investors, reducing market risks.
Caught up in the market storm, UniCredit had stalled the launch
of its senior non-preferred bond.
In presenting its third-quarter earnings earlier this month, the
bank's chief financial officer said UniCredit aimed to sell
between 3-5 billion euros of loss-absorbing securities by the
first quarter of next year.
UniCredit CEO Jean Pierre Mustier had said at the time that
meetings with investors confirmed strong interest for the bank's
debt.
Pimco already has a relationship with UniCredit as together with
rival Fortress, the U.S. asset manager last year invested in a
jumbo 17.7 billion euro bad loan securitisation sale carried out
by the Italian bank.
(Reporting by Elvira Pollina and Valentina Za; Editing by
Alexander Smith)
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