BPI mandates group of banks to issue €500 million in bonds

Banco BPI today assigned a mandate to a group of banks to issue 500 million euros (no-grow) at 5.5 years, according to Jornal Económico.

The bank led by João Pedro Olivera e Costa mandated CaixaBank, Credit Agricole CIB, HSBC, IMI-Intesa Sanpaolo, LBBW, and Nataxis Group to lead the issue of European Covered Bonds (Premium).

The issuance of €500 million is being made on the back of the Mortgage Bond Issuance Programme and is made up of quality prime Portuguese residential mortgages according to the International Financing Review (IFR) which adds that the bonds should receive a Moody’s classification of Aaa and AAH from DRBS.

European covered bonds are high-quality, dual-recourse debt instruments issued by banks to finance mortgages and public sector loans, backed by a dedicated pool of high-quality collateral. Investors benefit from direct recourse to this collateral and the issuing bank, with robust EU regulations ensuring investor protection and a high level of safety, as evidenced by a long history without defaults.

Such covered bonds are a cornerstone of long-term finance for many EU Member States as a key instrument to channel funds to the property market and public sector entities.

Basically debt obligations issued by credit institutions, they offer a so-called double-recourse protection to bondholders: if the issuer fails, the bondholder has a direct and preferential claim against certain earmarked assets and an ordinary claim against the issuer’s remaining assets.

Source: Económico