Regulatory Capital - All Articles

  • Standard Life reins in pricing on strong UK demand

    UK insurer Standard Life printed its debut unguaranteed holding company tier two bond this week, generating £2.5bn of chunky orders and squeezing the pricing to 385bp from the initial pricing thoughts of low 400bp area over Gilts.

    • 30 Nov 2012
  • Swedbank finds real money support for ‘tight’ bond but UK interest wanes

    European real money investors showed solid demand for Swedbank’s 10 year non-call five tier two euro bond on Wednesday, taking some 82% of the bonds. However, UK accounts showed less interest than for other recent Nordic tier twos, underscoring the extent to which spreads have tightened in the asset class.

    • 30 Nov 2012
  • BPE targets sub and prefs in any and all buyback

    Banco Popular Español is offering to buy €702.7m of its tier one and tier two instruments at a small premium to market value.

    • 30 Nov 2012
  • Achmea to buy back GGs as Dexia increases tender cap

    Dutch lender Achmea Hypotheekbank is offering to buy back up to $900m of government guaranteed debt in a liability management exercise, a move that will reduce its state aid payment burden. Meanwhile, Dexia Crédit Local increased the cap on its subordinated debt buyback to repurchase all of the bonds investors tendered.

    • 30 Nov 2012
  • Bankers hope for RAC-eligible perpetuals after SocGen success

    An adventurously structured perpetual tier two bond from Société Générale, which gives the bank an equity ratio boost with ratings agency Standard & Poor’s, could open the door for similar deals from other banks looking to bolster their capital structures, market participants said this week, writes Will Caiger-Smith.

    • 30 Nov 2012
  • Markit Data 1283

    • 30 Nov 2012
  • Hypo Alpe Adria finishes roadshow for tier two note

    Austria’s Hypo Alpe Adria International Bank finishes its European roadshow today (Friday) to discuss a government guaranteed note that will count as tier two in its capital ratio. A Reg S transaction may follow next week, depending on both market conditions and European Commission approval.

    • 30 Nov 2012
  • BFA seeks €6.5bn in debt for equity swap

    BFA Group, the parent of Spanish bank Bankia, hopes to raise €6.5bn of capital through a debt for equity exchange on Bankia shares, it said on Wednesday. The group was presenting highlights of a strategic plan to return the bank to profit next year.

    • 30 Nov 2012
  • RBS turns to dollars for tier two capital

    Royal Bank of Scotland Group found investors still in the hunt for yield when it priced a $2.25bn 10 year subordinated tier two note this week.

    • 30 Nov 2012
  • BFA plans debt for equity swap

    BFA Group, the parent of Spanish bank Bankia, hopes to raise €6.5bn of capital through a debt for equity exchange on Bankia shares, it said on Wednesday. The group was presenting highlights of a strategic plan to return the bank to profit next year.

    • 29 Nov 2012
  • Real money supports tight Swedbank tier two but UK interest wanes

    European real money investors came out in force to buy Swedbank’s €500m 10 non-call five year tier two bond on Wednesday. But UK accounts showed less interest than for other recent Nordic tier twos, suggesting they may have felt the level was simply too tight.

    • 29 Nov 2012
  • SocGen set to price T2 perp after demand tops $10bn

    Société Générale received over $10bn of orders from a broad geographical range of investors for its perpetual non-call 5.5 year tier two, setting a benchmark which could be emulated by other banks looking to gain equity credit from Standard & Poor’s.

    • 29 Nov 2012
  • Swedbank hits euro market for “extraordinarily aggressive” tier two

    Swedbank has joined the year-end rush for bank capital, launching a euro denominated subordinated 10 year non-call five bond which has been priced with a minimal new issue premium compared to deals from its Nordic peers.

    • 28 Nov 2012
  • SocGen RACs up perpetual tier two

    Investors were keen to participate in an unusually structured tier two instrument from French lender Société Générale on Wednesday morning. The Reg S deal, which has a perpetual maturity and features deferrable coupons to qualify for Standard & Poor’s equity credit, had attracted over $2bn of orders by late morning.

    • 28 Nov 2012
  • Standard Life and Svenska sizzle in sterling as Coventry taps euros

    UK insurer Standard Life went from roadshow to reality on Monday, bringing a 30 year non-call 10 subordinated bond in its domestic market, having spent last week meeting investors. Meanwhile, Svenska Handelsbanken was also in the sterling market with a 10 year senior unsecured bond.

    • 26 Nov 2012
  • EC rebuffs CRD IV delay: says rules in Europe’s interest

    CRD IV and CRR I must start coming into effect next year, the European Commission says, despite an industry call for a one year delay given that Basel III will not be implemented on schedule in the US.

    • 26 Nov 2012
  • Depfa, Dexia Crédit Local, NIBC look to LM market in search for capital boost

    Depfa, Dexia Crédit Local and NIBC Bank stepped into the liability management market this week, targeting capital instruments in a bid to raise common equity ratios.

    • 23 Nov 2012
  • BBVA, Ibercaja add to capital with sub LM

    Spanish lenders BBVA and Ibercaja have bought back almost €1bn of subordinated debt and ABS in liability management offers that will boost their capital ratios.

    • 23 Nov 2012
  • Standard Chartered quietly joins top table with ultra tight tier two

    While Allianz was taking the Asian dollar market by storm on Tuesday (see cover story), Standard Chartered Bank quietly slipped one of the year’s tightest tier two deals into the pockets of European institutional investors, pricing in line with the curves of other high quality core European credits such as Rabobank.

    • 23 Nov 2012
  • Allianz reaps rewards of global recognition in Asian high net worth market

    Demand among high net worth private banking clients in Hong Kong and Singapore for subordinated financial issuance showed no signs of abating this week, as Allianz became the latest borrower to leap into the popular market, writes Will Caiger-Smith.

    • 23 Nov 2012
  • Hypo Alpe Adria mandates for tier two GG

    As the capital pipeline builds, Hypo Alpe Adria Bank International has mandated for a government guaranteed tier two instrument, understood to be the first of its kind.

    • 23 Nov 2012
  • Markit Data 1282

    • 23 Nov 2012
  • Allianz performance highlights PB demand

    Allianz’s $1bn perpetual non-call six year bond has tightened as much as a point in secondary trading, which bankers say signals the demand available from private banking networks for the best FIG borrowers.

    • 22 Nov 2012
  • BBVA, Ibercaja boost capital with buybacks

    Spanish lenders BBVA and Ibercaja have bought back almost €1bn of subordinated debt and ABS in liability management offers that will boost their capital ratios.

    • 22 Nov 2012
  • Dexia Crédit Local, NIBC launch tier two LM for capital boost

    Dexia Crédit Local and NIBC Bank are offering to buy back tier two bonds in capital-generating liability management exercises.

    • 21 Nov 2012
  • StanChart sub trades up as Allianz brandishes $11bn book

    Standard Chartered’s 10 year euro subordinated bullet performed well in the secondary market on Wednesday, garnering praise from bankers for its smooth execution and granular orderbook. Meanwhile, Asian accounts continued to pile into Allianz’s perpetual non-call six year sub bond overnight, pushing the book to over $11bn.

    • 21 Nov 2012
  • Eastern Allianz overshadows StanChart’s euros in sub debt

    Allianz stormed into the Asian dollar market for subordinated debt with a perpetual non-call six year issue on Tuesday, turning last week’s roadshow and Monday’s investor calls into more than $8bn of orders. By contrast, Standard Chartered hit the euro market with less fanfare, launching a euro denominated tier two bond later in the morning.

    • 20 Nov 2012
  • Depfa targets deeply discounted pref buyback

    Depfa is offering investors 1 cent on the euro to approve a mandatory buyback of preference securities well below par.

    • 20 Nov 2012
  • Allianz opts for perp in dollars as senior roadshows continue

    Allianz is looking to price a perpetual dollar Reg S deal this week after announcing the deal’s structure on Monday. More dollar denominated subordinated debt could come to market this week, bankers say, although Coventry Building Society and SNS Bank are looking at possibilities for euro senior unsecured issuance.

    • 19 Nov 2012
  • Mid East issuers to get bug for Basel III hybrids, says Fitch

    Abu Dhabi Islamic Bank’s recently issued Basel III compliant hybrid tier one sukuk performed well in secondary markets this week, fuelling speculation that the first-of-its-kind deal could encourage further supply.

    • 16 Nov 2012
  • Insurance subordinated in demand as Hannover Re-prices curve

    German reinsurer Hannover Re demonstrated the depth of investor demand for higher-yielding subordinated paper this week, pricing a €500m tier two bond off a €5.6bn book which traded up to 30bp tighter in the aftermarket and reigned in the rest of its curve by around 15bp.

    • 16 Nov 2012
  • Barclays shines a light in Coco fog, but no wave of copycat deals in sight

    Barclays set another point on the contingent capital curve this week, selling a $3bn tier two that carries permanent write-off risk. Despite the $17bn order book, bankers believe the asset class will remain in its infancy for some time — and not just because some real money accounts balked at the instrument’s high trigger. Katie Llanos-Small reports.

    • 16 Nov 2012
  • Barclays’ whopper underscores Coco viability as 'who’s next' question goes unanswered

    The size and demand of Barclays’ $3bn 10 year contingent capital instrument shows there is a broad investor base for these instruments, but bankers are sceptical that many other borrowers are preparing their own transactions.

    • 15 Nov 2012
  • Orders pile in for Barclays Coco

    Investors are showing strong support for Barclays’ contingent capital instrument, with billions of dollars of orders flooding in for the dollar denominated tier two with permanent write-down features.

    • 14 Nov 2012
  • ADIB hybrid tier one sukuk rallies in secondaries, encourages further supply

    Abu Dhabi Islamic Bank’s recently issued Basel III compliant hybrid tier one sukuk — the first of its kind — has traded strongly in secondary markets this week, sending an encouraging signal for further supply.

    • 14 Nov 2012
  • Nova Kreditna Banka offers investors choice with new LME

    Slovenian lender Nova Kreditna Banka Maribor is offering investors the chance to either sell or exchange their holdings in a liability management exercise targeting a €50m perp and a €100m perpetual loan participation note.

    • 14 Nov 2012
  • Hannover Re reprices secondary curve with tight tier two

    Investors rushed into Hannover Re’s existing tier two paper alongside the new subordinated bond it priced on Tuesday, helping the issuer’s curve, and those of some of its peers, to tighten by up to 15bp.

    • 14 Nov 2012
  • No one-size-fits-all PLAC, say UK bank bosses

    The chief executives of Lloyds, Standard Chartered and RBS stressed that regulators should have the discretion to set primary loss absorbing capacity (PLAC) levels for each individual bank, rather than an industry standard, in evidence to the Parliamentary Commission on Banking Standards on Tuesday.

    • 14 Nov 2012
  • Ibercaja seeks capital boost with sub, ABS buyback

    Ibercaja has launched a below par buyback on close to €3.3bn of ABS, tier one and lower tier two notes.

    • 13 Nov 2012
  • Hannover Re grabs yield hunters with euro sub debt

    German insurer Hannover Re is set to price a €500m 30 year non-call 10 deal on Tuesday, becoming the latest in a string of insurers to tap demand for subordinated debt.

    • 13 Nov 2012
  • Market eyes comps as Barclays roadshow nears end

    As Barclays enters the final days of its roadshow for a contingent capital instrument, market participants say investors will examine a wide range of factors to determine pricing for the note.

    • 12 Nov 2012
  • Allianz gears up for Asian dollars

    Allianz is set to join the growing club of European FIG issuers that have tapped the Asian investor base for US dollar denominated capital in recent months, as it prepares to meet investors in the region from Thursday.

    • 12 Nov 2012
  • Barclays tier two marks watershed for UK banks, raises hopes of Coco revival

    Barclays’ bold step into contingent capital this week has revived hopes for the asset class, with market participants saying it was all but certain that UK regulators would have sanctioned the securities for inclusion in regulatory capital ratios — even though they have not yet done so publicly, writes Katie Llanos-Small.

    • 09 Nov 2012
  • Intesa gets high take-up for controversial LM exercise

    Intesa Sanpaolo left some investors out in the cold this week after it stuck to the cap on its controversial liability management exercise, buying back €1.8bn equivalent of tier two debt compared to the €2.2bn investors tendered.

    • 09 Nov 2012
  • Haldane, Bailey diverge on bank capital sums

    Two UK bank regulators displayed differing attitudes to risk measurement and capital ratios this week. The Financial Services Authority’s Andrew Bailey defended risk-based models to calculate capital requirements, while the Bank of England’s Andrew Haldane called for simpler methodologies.

    • 09 Nov 2012
  • Risk weighting necessary, says FSA’s Bailey

    The FSA’s Andrew Bailey has defended the use of risk based models to calculate bank capital requirements, but also called for simplicity in the system.

    • 08 Nov 2012
  • Intesa sticks to cap despite surge of interest in exchange

    Intesa Sanpaolo has stuck to the cap on its liability management exercise, accepting €1.8bn equivalent of tier two securities, despite investors tendering €2.2bn of bonds for the exchange.

    • 07 Nov 2012
  • Barclays tests high trigger coco demand

    The currency and maturity structure of a new contingent capital instrument being proposed by Barclays is still to be decided, but the security is set to have a 7% write-down trigger and feature a tier two host, EuroWeek Bank Finance understands.

    • 06 Nov 2012
  • Barclays eyes new issue with global roadshow

    Barclays has mandated five banks to meet investors in Asia, Europe and the US. The deal may be a contingent capital instrument, given that the bank said last week it had discussed such securities with investors and the FSA.

    • 05 Nov 2012
  • BBVA retires €692m of lower tier two

    BBVA is set to book an estimated capital gain of €107m after buying back €691.7m of lower tier two debt in a liability management exercise. This figure represents the repurchase of non-consent securities only, so the final amount, which will be revealed once bondholder syndicates have approved the repurchase of the two consent securities, is likely to be larger.

    • 02 Nov 2012
  • Friends Life follows trail of demand to Asian dollar market

    Asian private bank investors helped UK insurer Friends Life price its debut Reg S dollar deal well through guidance, and then trade even tighter, in the latest of several other insurance and bank deals to find success in the region over recent months.

    • 02 Nov 2012
  • Intesa shows the future of tier two capital

    European tier two capital securities dropped by up to three points in price this week, as investors digested a decision by Intesa Sanpaolo to remove call options from €2.6bn of bonds it is targeting in a liability management exercise.

    • 02 Nov 2012
  • FIG trio braves the storm amid disrupted week

    Bank of Montreal and Capital One Financial reopened the dollar market for investment grade FIG with hefty deals after the two-day enforced shutdown following super-storm Sandy.

    • 02 Nov 2012
  • BTN closes books for government’s rights portion

    Syndicate officials working on Bank Tabungan Negara’s rights issue were set to close the books on the government’s portion — which it decided not to take up — on Wednesday, and were aiming to price the shares between Rph1,200 and Rph1,400 each, said a banker close to the deal.

    • 01 Nov 2012
  • Friends Life tightens pricing to get $575m

    UK insurer Friends Life tightened the pricing of its debut Asian dollar Reg S tier two deal on Thursday, printing $575m of perpetual non-call six paper at a yield of 7.875%. Bankers said the deal underlined the strength of demand for high yielding paper among Asian high net worth investors, although some felt it had been helped along by pricing that was too generous.

    • 01 Nov 2012