Banks embrace equity conversion structures in dollar AT1 drive

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By Tyler Davies
23 Mar 2017

European bank issuers of additional tier one (AT1) have been abandoning the euro market in favour of dollars. But some have had to start embracing equity conversion structures to join in because it is one of the few ways to account for AT1s as debt and avoid a mark-to-market swap.

When Sweden’s Skandinaviska Enskilda Banken (SEB) sold $600m of perpetual non-call five year capital last week, it was the first time a bank with temporary loss-absorbing AT1s outstanding had switched to using an equity conversion structure.

Denmark’s Danske Bank followed suit this week, selling $750m of new ...

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