Investors snap up rare tier twos as cap ratios rise

By Frank Jackman
22 Apr 2021

Bank of Cyprus and Nykredit, at opposite ends of the FIG ratings spectrum, issued tier two bonds over the last week and both found strong demand from investors for the extra spread the product offers over senior debt. But with bank capital ratios rising, there seems little appetite among other issuers to follow.

“Given how low yields are in general, transactions offering yield like our tier two are quite attractive – there’s not many alternative names with attractive yields,” said Despina Kyriakidou, treasury director at Bank of Cyprus. “The market is very conducive now, especially for higher yielding issuers like us.”

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