Bond Market News

Italian lender UniCredit Spa is said to have received bids for parts of its leasing unit as per people familiar with the matter. The sources added that UniCredit is evaluating five non-binding offers including bids from PE firms Bain and Christofferson Robb & Co as well as two foreign industry players. This is in line with CEO Andrea Orcel focus on businesses that do not take up too much capital and his strategy of generating enough capital to pay shareholders dividends and buybacks worth €16bn ($18bn) through 2024. The sources said that while UniCredit invited bids from 50 investors, just 16 responded and 5 submitted non-binding offers. Italian leasing firm Alba Leasing is also said to be interested; however, Alba may need to raise capital before submitting a bid. UniCredit’s leasing arm has ~€10bn of credit on its books including €1bn of non-performing debt, of which €500mn has been written down. Over 67% of its portfolio consists of real estate leasing contracts with the balance relating to equipment. None of the five bids were for the entire business so UniCredit may only offload a part of it or may call off the transaction entirely.

UniCredit’s 8% Perps traded 0.5 points lower to 108.625 yielding 4.11%.

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