Clifford Chance has bagged a role as the sole adviser on Generali’s €4bn (£2.74bn) Tier 1 issue, the first ever from an insurer in Italy.
Rising star Michele Crisostomo led the team advising the banks, JPMorgan, HSBC and MedioBanca. Generali’s in-house team is using document structures developed by Clifford Chance.
Although such deals have been theoretically possible in Italy for some time, no insurers have been willing to carry them out due to the bad tax treatment they receive.
But Italian insurance regulator Isvap has relaxed its stance after new tax regulations were introduced in January, which treat Tier 1 issues the same as vanilla bond issues.
Crisostomo said insurers would be tempted to issue more Tier 1s, but that the real boom would happen in other sectors. “We expect a few deals from insurers, but the biggest push will come from banks and corporates this year,” he said.
Banca Italease is leading the way. When it issues its Tier 1 capital this year, it will become the first to do so without any link to merger activity. Again, Clifford Chance and Crisostomo are taking the lead on the deal. The firm has advised on every single Tier 1 issue in Italy for the past eight years, amounting to around 15 deals.
The change in stance from Isvap and Banca d’Italia, the Italian national bank, is good news for those law firms with capital markets and tax expertise. Crisostomo added: “Fees are still very big and structuring fees are definitely the most interesting in this area.”
Clifford Chance’s magic circle competitors are also well placed to pick up on the lucrative structuring work. Nigel Pridmore at Linklaters and Massimiliano Danusso at Allen & Overy were also mentioned as contenders in the market thanks to the strong capital markets practices at both firms.