Maturity: May 6, 2005
Issue/re-offer price: 99.86
Coupon: three month Euribor
Spread at re-offer: Euribor plus 205bp
Launched: Friday April 12
Joint books: ABN Amro, Mediobanca
ABN Amro - This is a borrower that is well known in its domestic market. There was a strong bid out of Italy for this name and the spread was appealing. Name recognition can overcome the lack of a rating.
It is not a frequent borrower, so it does not see the need for a rating. It is not a big transaction, and would not compensate for the cost of having a rating.
The initial price guidance was 230bp, and then the next day it was 205bp, which is where it is re-offered. The coupon was 200bp.
Mediabanca - Lucchini is a great name for retail investors. We are quite surprised at how successful this deal has been: it sold out in only a few days. Italian investors were the largest participants in the deal but there was also demand out of Luxembourg and France.
We did not syndicate the issue because we felt confident we would be able to place it easily between ourselves and ABN Amro. We had a good book, and most of the paper was sold at the re-offer spread of Euribor plus 205bp.
The company is unrated, and we marketed Lucchini as a speculative grade credit but it is a very well known brand in Italy. The proceeds from this issue will be used to consolidate and refinance Lucchini's existing debt.