Bloomberg News

Intesa Sells First Italian Unsecured Bank Bond Since July

February 01, 2012

(Adds final pricing details in second paragraph.)

Jan. 31 (Bloomberg) -- Intesa Sanpaolo SpA, Italy’s second- biggest bank, sold senior, unsecured bonds in the first benchmark offering of the debt from one of the country’s lenders since July.

The 1.5 billion euros of 18-month bonds were priced to yield 295 basis points, or 2.95 percentage points, more than the swap rate, down from initial guidance of 300, according to a banker involved in the deal.

UniCredit SpA was the last Italian lender to sell benchmark senior, unsecured debt when it raised 1 billion euros from floating-rate notes due 2013, according to data compiled by Bloomberg. Banks from the euro region’s peripheral countries including Italy, Spain and Portugal have been largely shut out of unsecured bond markets since July as the region’s debt crisis drove up funding costs.

“Intesa is the most robust name in Italy, it’s unsurprising that it’s the first Italian bank to come back to the market,” said Alberto Gallo, a credit strategist at Royal Bank of Scotland Group Plc in London.

Intesa Sanpaolo’s communications department didn’t respond to a phone call and e-mail for comment.

Deutsche Bank AG, Goldman Sachs Group Inc. and Societe Generale SA managed the sale with Banca IMI SpA, Intesa Sanpaolo’s investment banking unit. The notes will be issued by Intesa Sanpaolo Bank Ireland Plc.

The yield on Intesa Sanpaolo’s 800 million euros of 3.5 percent senior, unsecured bonds due 2013 is 264 basis points relative to the benchmark swap rate, Bloomberg Bond Trader prices show. The spread has narrowed from as much as 658 basis points in November.

“It’s definitely a good sign that they feel able to tap the market and doubly so in unsecured format,” said Roger Francis, a credit analyst at Mizuho International Plc in London. “By sticking to the short end where there’s plenty of demand they are clearly taking the path of least resistance.”

--Editors: Andrew Reierson, Paul Armstrong

To contact the reporter on this story: Hannah Benjamin in London at hbenjamin1@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net


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