UBS woos institutions with bullet tier two, others to follow

09 Aug 2012

UBS’s low trigger tier two deal, set to price on August 10, could be a watershed moment for contingent capital. If successful, it will prove that institutional investors are happy to buy structures that incorporate the risk of permanent writedown, bankers said on Thursday.

The US dollar transaction will contribute to the 6% low-trigger progressive capital bucket required by Swiss regulators. It is similar in structure to the $2bn 10 non-call five note the issuer sold in February, in that it will be permanently written down if UBS’s common equity ratio falls ...

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