MILAN (Reuters) – UniCredit has decided to skip the payment of coupons on its CASHES instrument relating to 2020 results after posting a 2.79 billion euro ($3.4 billion) loss last year, a spokesman for Italy’s no.2 bank said on Friday.
A reported loss is one of the conditions which allow UniCredit not to pay coupons on the 2.98 billion euro convertible and subordinated equity-linked notes dubbed CASHES the bank issued in 2008 to bolster its capital reserves.
The spokesman said that Mitsubishi UFJ Group, which acts as UniCredit’s fiduciary bank for the CASHES, had informed investors that conditions for the payment of the coupons in relation to 2020 results had not been met.
“While this can be a negative surprise for the CASHES bond holder, this should not affect the bank ability to pay dividends on 2021 profit nor impact the announced buyback,” Citi analysts said in a note.
UniCredit paid out 268 million euros to investors as dividends in April and is currently conducting a share buyback worth 179 million euros which it expects to conclude by the end of September.
Shareholders in April approved an additional 652 million euro buyback subject to current pandemic-induced regulatory restrictions on investor remuneration ending after Sept. 30.
($1 = 0.8176 euros)
(Reporting by Valentina Za; Editing by Chizu Nomiyama)
