FIG buyers focus on lower capital targets as UniCredit presents AT1

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By Bill Thornhill, Tyler Davies
13 Dec 2017

Investors looking at UniCredit’s new additional tier one (AT1) trade on Wednesday will have been pleased to learn that the firm’s capital requirements have fallen by 50bp. Meanwhile, covered bonds are set to remain well supported, and the equity tranches of NPL portfolios look likely to offer securitization investors oversized returns next year.

UniCredit said at its capital markets day earlier in the week that the European Central Bank had lowered its Pillar 2 capital requirement from 2.5% to 2%, giving the bank a 250bp capital cushion above the point at which it would have to stop paying coupons on ...

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