High-trigger deals going cheap, say analysts

By Will Caiger-Smith
31 Jan 2014

Investors are not charging issuers enough for the additional risk of high triggers for loss absorption in additional tier one and contingent capital deals, because supply is low and the coupons on these instruments are so enticing, FIG market participants said this week.

Bank across Europe are expected to hit the AT1 and Coco markets in droves in the next few months — a Nordic bank is widely expected to the next issuer — but while the fourth Capital Requirements Directive sets a minimum loss absorption trigger of 5.125% common equity ...

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