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UPDATE 1-Vicenza kicks off marketing for crucial guaranteed bond
February 20, 2017 / 9:01 AM / 7 months ago

UPDATE 1-Vicenza kicks off marketing for crucial guaranteed bond

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By Alice Gledhill

LONDON, Feb 20 (IFR) - Regional Italian lender Banca Popolare di Vicenza has begun remarketing a senior bond, hoping a government guarantee will appease investors mindful of its challenging credit story.

The issuer said on Friday that it was hoping to complete a partial resale of a €3bn 0.50% 2020 senior unsecured bond, issued and retained earlier this month, which benefits from a state guarantee.

It is the first bank to sell such a security in the public debt market since the guarantee scheme was approved.

Leads Banca IMI and Morgan Stanley started marketing the expected €1bn deal (BBB+/BBBH, Fitch/DBRS) at initial price thoughts of 65bp area over the 4.5% February 2020 BTP on Monday morning.

The guarantee is intended as a tool to help Italy’s weakest lenders access capital markets and counter a drop in retail deposits as they try to restructure.

The announcement follows a torrid period for Vicenza’s outstanding debt as the fate of the lender, hamstrung by a capital shortage and on track for a state rescue, hangs in the balance.

Italy’s parliament last Thursday approved a government plan to create a €20bn fund to support the country’s banks, which are saddled with some €276bn of bad loans.

Banca Monte dei Paschi di Siena, Vicenza and Veneto are expected to be the fund’s primary beneficiaries, after recent capital raises for all three collapsed.

Vicenza’s €200m 9.5% 2025 Tier 2, sold at the end of 2015, dropped to its lowest ever level in recent sessions. It was bid around a cash price of 27 on Monday, from the mid 50s at the start of the year, according to Tradeweb prices. (Reporting by Alice Gledhill, editing by Robert Smith, Helene Durand)

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