Nordea beat the record for the lowest coupon on an additional tier one (AT1) bond in a core currency by some margin on Tuesday, pricing its deal at 3.5%. It had market participants wondering whether AT1 prices should be marketed at a spread over the base rate rather than as a coupon. At the same time, some said investors are showing complacency over the reset spread and call optionality they give issuers, writes Jasper Cox.
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