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Godfather Part II

Sicily's wait for money is over. The regional government found itself nearly L1.7 trillion ($1 billion) late last year and over 40 banks refused to lend. Nor was there interest in a local bond issue.

Thundering to the rescue came Merrill Lynch, which won the mandate for a Eurobond, and finally brought the €880 million euro-denominated deal in mid-April. There were three tranches. Two public: €200 million fixed-rate, and €400 million floating – since increased to €210 million and €433 million respectively. The rest was a private placement.

The spread on the fixed-rate paper of 47 basis points over OATs implies a rating of between triple-B and single-A.

"The deal certainly took some time to put together," says Niall Cameron, director in new issues on Merrill Lynch's London syndicate desk.

Merrill left the Italian investors alone as it built up a book abroad. "Then we showed them the demand and, after some persuasion, the Italians jumped on board." Italian investors accounted for 34% of the paper. Antony Currie

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