When Italian lender UniCredit sold an entire €3 billion five-year senior non-preferred bond with a 7.83% coupon to US investment management firm Pimco in late November it was a demonstration of far more than the brutal impact that the country’s political turmoil has had on Italian banks’ cost of borrowing.
It showed the huge competitive advantage that today’s enormous asset managers enjoy – and just how much they can charge for access to funding.
Having been locked out of the markets for most of the year, UniCredit was clearly in a tight spot, and still only around a third of the way through its 2018 funding plan by October.
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