UniCredit leaning towards repaying AT1 bond in June: source

UNICREDIT is leaning towards repaying a perpetual bond at the earliest opportunity in June, a source close to the matter told Reuters, in a move to show it has ample capital while keeping funding costs in check as markets reel from a crisis of confidence.

UniCredit in recent weeks put in a request with European Central Bank supervisors to repay a 1.25 billion euro 6.625 per cent perpetual bond on Jun 3, the first opportunity it has to repay, the source said.

While UniCredit has signalled its intention to redeem the bond, it has until early May to make a final decision.

A supervisory source told Reuters that redeeming AT1 bonds is a good way to instill confidence in markets if banks have enough capital, which the source said was the case for UniCredit.

A spokesperson for UniCredit declined to comment. The European Central Bank declined to comment. REUTERS