UPDATE 1-BNP Paribas reopens market for bank unsecured bonds with 1 bln euro sale

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds context and comments in paras 3, 4 and 5) LONDON, April 4 (Reuters) - BNP Paribas raised 1 billion euros ($1.09 billion) from selling a senior unsecured bond on Tuesday, a lead manager memo seen by Reuters showed, in the first sale of such debt since the forced Credit Suisse-UBS merger roiled the market for bank bonds. While there have already been some covered bond sales from banks, the transaction marks the first senior unsecured bond sale following upheaval in March after Credit Suisse Additional Tier 1 (AT1) bond holders were wiped out as part of a rescue by UBS.


The new BNP bond is a senior non-preferred bail-in bond which sits below covered bonds and senior preferred bonds but above subordinated debt, including AT1. "This deal shows that a strong name was needed to reopen the market, and that there is sufficient demand for this type of bond," said Joost Beaumont, head of bank research at ABN Amro. Demand for the new eight-year green bond exceeded 1.85 billion euros and the bond priced with a yield of 4.358%, according to the memo. "The deal acts as an important milestone for bank funding markets," ING credit strategists wrote in a note. "The green format provides more support for the deal in the uncertain market backdrop."

($1 = 0.9179 euros) (Reporting by Chiara Elisei; editing by Dhara Ranasinghe)

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