Further to the announcement today of UniCredit S.p.A. ("UniCredit" or the "Issuer") having entered into an agreement for the disposal of a stake equal to 32.8 per cent of Bank Pekao S.A.'s ("Pekao" or the "Company") share capital to Powszechny Zakład Ubezpieczeń S.A. ("PZU") and Polski Fundusz Rozwoju S.A. ("PFR") (the "M&A Transaction"), UniCredit announces the launch of an offering (the "Offer") of 1,916 secured equity-linked certificates (the "Certificates"), having an aggregate reference amount of approximately EUR 500 million, mandatorily settled in ordinary shares (the "Shares") of the Company on or before 15 December 2019 (the "Expiry Date").

The Certificates are designed to dispose at the Expiry Date (unless previously settled, as further described below) of the Issuer's remaining 7.3 per cent stake in the Company (pro-forma of the M&A Transaction) whilst enabling the Issuer to benefit from the potential upside in the shares of Pekao resulting from the additional value which PZU and PFR may be able to generate following the completion of the acquisition.

The announced transactions over UniCredit's entire stake in Pekao are a tangible demonstration of the strategic approach announced on 11 July 2016; that, going forward, the UniCredit Group intends to focus on reinforcing and optimising its capital position, whilst maintaining strategic flexibility to seize value creating opportunities. The full outcome of the strategic review will be unveiled at a Capital Markets Day in London on 13 December 2016.

The Certificates will upon issue have as underlying 10,000 Shares each, and will be issued at an issue price expected to be between 85.35 per cent and 86.35 per cent of the notional reference amount. The Certificates will not bear any coupon and will entitle the holders to receive a net cash amount equal to 81 per cent of the gross amount of any cash distribution paid in relation to the underlying Shares and received by the Issuer.

Unless previously settled at the option of the Issuer or the holders of the Certificates, or upon the occurrence of certain accelerated settlement events, and subject to the Issuer cash settlement option referred to below, each Certificate will be mandatorily settled on the Expiry Date by delivery of a number of Shares equal to the product of the pro rata share of the Settlement Property (as described below) and a settlement ratio to be determined on the basis of a minimum settlement price (the "Minimum Settlement Price") and a maximum settlement price (the "Maximum Settlement Price"), all as further described in the terms and conditions of the Certificates. The Minimum Settlement Price will be equal to the volume weighted average price of the relevant Shares on 9 December converted into EUR (the "Reference Price"). The Maximum Settlement Price is expected to be set at a premium ranging from 15 per cent to 17 per cent over the Reference Price.

The initial settlement property comprises 19,160,000 Shares (the "Settlement Property"). The Settlement Property will be subject to any adjustments required under the terms and conditions of the Certificates.

A Polish law governed financial pledge over the Settlement Property will be granted in favour of the trustee of the Certificates, on behalf of itself and the holders of the Certificates.

Upon settlement of any Certificates, the Issuer will have the flexibility to settle in cash, deliver the relevant Settlement Property or any combination thereof, except that there will be no cash settlement in the case of the occurrence of an automatic accelerated settlement event (as further described in the terms and conditions of the Certificates).

The proceeds of the Offer will be used for general corporate purposes of the Issuer. The disposal of the Pekao shares representing the Settlement Property is expected to generate a capital release upon the expiration of the Certificates.

The Certificates will only be offered to designated institutional investors in Italy and abroad, and will not be offered in or into the United States, Canada, Australia, Japan, South Africa or in any other jurisdiction where such offer or sale of the Certificates would be prohibited by applicable laws.

The outcome of the placement and the final terms of the Certificates are expected to be determined and announced on 8 December 2016 (the "Placement Date") and the Offer is expected to close on or around 15 December 2016 (the "Closing Date").

Application will be made to admit the Certificates to trading on an internationally recognised, regularly operating, regulated or non-regulated stock exchange or market, determined by the Issuer, by no later than 90 days following the Closing Date.

In the context of the transaction, the Issuer and its subsidiaries have agreed to a lockup period of 90 days from (and including) the Placement Date, subject to customary exceptions (including an exception in relation to the closing of the M&A Transaction) and to waiver by the Joint Bookrunners.

Morgan Stanley, UBS Investment Bank and UniCredit Corporate & Investment Banking are acting as Joint Bookrunners in connection with the Offer.

This press release relates to the disclosure of information that qualified, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Source: Unicredit statement