Active Joint Bookrunner in Novo Banco inaugural Covered Bond transaction

The Intesa Sanpaolo IMI Corporate & Investment Banking Division took part in Novo Banco’s 500 million euros inaugural Covered Bond transaction as Active Joint Bookrunner. This is a landmark transaction for the Portuguese issuer, which besides marking its return to the primary Debt Capital Market for the first time since last May, represents the first transaction launched in Covered Bond space since they converted their Covered Bond programme to soft bullet from conditional pass-through.

On Monday February 19th, Novo Banco announced a Mandate for a 500 million euros “Will Not Grow” (WNG) Covered Bond sale and made themselves available for investors’ calls arranged in a deal-related roadshow format. The marketing exercise, spanning two days, was essential in building a strong shadow book well before books were actually opened.

The astonishing demand gathered through the sale resulted in the largest orderbook for a Covered Bond in the last couple of years, at around 5 billion euros. The outstanding 9.8x oversubscription ratio represents a multi-year record for a Covered Bond and is of the highest for a benchmark in Euro deal this year across the board. Thanks to the strong execution the deal attained a pricing of only 45bps over mid-swaps.

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