MILAN - Intesa (LON:0HBC) Sanpaolo (OTC:ISNPY) has successfully executed its most substantial bond issuance in the last ten years, totaling $3 billion. This dual tranche offering hit the American market today and attracted significant investor interest, leading to a robust order book nearly doubling initial expectations.
The Italian banking group's latest foray into the debt market includes two parts: a $1.5 billion Senior Preferred 10-year bullet bond with a fixed-rate coupon of 7.20%, and a $1.5 billion Senior Preferred 30-year bond at a fixed-rate coupon of 7.80%. The bonds are priced at US Treasury +280 basis points (bps) and +325 bps respectively.
Enthusiasm for the offering was immediate, with orders surpassing $5 billion within just two hours of the announcement. The strong demand, particularly from investors in the United States, the United Kingdom, and Asia, led to an order book that nearly reached $11 billion. This overwhelming interest allowed Intesa Sanpaolo to tighten the spreads by up to 30 bps from initial price thoughts (IPTs), underscoring the strong investor confidence in the bank's financial instruments.
The favorable market conditions were partly set by a recent update from Moody’s, which improved the sovereign rating outlook—a move that played a role in facilitating Intesa Sanpaolo's successful return to the market. Alessandro Lolli, Group Finance Director at Intesa Sanpaolo, directed this successful transaction.
Despite undertaking this financial milestone, shares of Intesa Sanpaolo traded at €2.52 each. This issuance represents a strategic step for Intesa Sanpaolo as it continues to navigate through the evolving financial landscape while securing long-term capital amidst fluctuating market conditions.
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